Tuesday, July 16, 2013

Fiery electricity bills and short term ways to reduce the heat

Electricity is a hot topic in Sri Lanka right now. In fact, the whole power sector could be generally considered a hot topic here (and world-wide), both from an everyday cost of living perspective (i.e. energy costs make up a large proportion of household and business expenses) and an environmental one.

There have been heated debates and protests in Sri Lanka for many years, but more recently it's been bubbling up due to recent changes in electricity tariffs.

And, there was this article a few weeks ago headlined as "Sri Lanka man dies of heart attack after shocking electric bill" that sent some people into a tizzy.

The Ceylon Electricity Board ("CEB") filed cost estimates of Rs 268 billion for the supply of electricity for 2013 with the Public Utilities Commission of Sri Lanka ("PUCSL") in late January 2013. This sparked general outcries particularly in light of the CEB recording a loss of Rs 61.2 billion in 2012 (i.e. an increase of over Rs 40 billion in losses from 2011). The CEB attributed the loss to the rise in electricity generation costs. Further losses in the same region as 2012 are forecast for 2013.

The PUCSL reviewed and published the revised tariffs on 12 March 2013, conducted public consultation in March 2013, received written submissions till 28 March 2013. The PUCSL received over 100 written submissions and numerous oral representations were made on 4 April 2013. The PUCSL issued its Final Decision on Electricity Tariffs 2013 in June 2013

There was public backlash over the revised tariffs when they were published, and then President Mahinda Rajapakse backtracked a bit amid rising opposition. This resulted in a slight revision in the tariffs.

Courtesy of sundaytimes.lk
All things considered it was a bit of a car crash situation for the Government for a multitude of reasons, especially given the history of fiscal management of public enterprises in Sri Lanka. This includes the CEB and Ceylon Petroleum Corporation ("CPC").

So with electricity tariffs soaring higher than ever before in Sri Lanka (and globally), it got me thinking about short term ways to reduce my electricity consumption. Last month, I received my residential monthly electricity bill and it was at least 25% to 30% higher than the previous month, even though my units of consumption stayed about the same as the previous month, due to the new higher electricity tariffs that kicked in.

Other issues within the power sector in Sri Lanka

Without going into all the ins-and-outs of the power sector in Sri Lanka, there are clearly some very key issues that need to be addressed, some of which relates to past practices and other to current and future energy strategy and operational performance of its public utilities. Some of these issues, it must be said, are not unique to Sri Lanka.

Broadly these key issues include, but are not limited to:

  • Re-visiting Sri Lanka's energy policy, particularly energy generation, expansion of alternative energy solutions and optimization of its transmission and distribution networks
  • Ensuring appropriate risk management plan is in place for hedging and forward energy contracts
  • Putting more focus on and setting targets towards operational efficiency, transformation, productivity and cost reduction within its public utilities, particularly CEB and CPC
  • Putting in place necessary controls to improve fiscal management of its public utilities as a priority
  • Greater independence given to the PUCSL to undertake its regulatory function
  • Creating better access to power industry technical specialists and resources

In many respects, Sri Lanka needs to move beyond it's current practice at a public level (i.e. the Government, Opposition and other) of politicizing key issues pertaining to the power sector. All this achieves is a sense of parties barking at each other like old fishwives to gain the popular vote. In effect, what's needed is more action and less talk.

In my opinion, the majority of the decisions and practices previously made by the government and it's public utilities are largely knee-jerk reactions to some poor business decisions. In a few instances some of these decisions may have been appropriate given Sri Lanka's recent end to a 30-year civil war, the global financial crisis and the limitations of being a small island nation. However, I would strongly encourage a paradigm shift in looking at issues and potential solutions moving forward.

Recent tariff hikes and what it means 

With the recent demonstrations and furor surrounding the tariff hikes it has been a bit of challenge 
trying to figure out where they finally landed.

Increases will have a direct impact on household electricity bills, but also other areas that you may not have considered. Retailers, businesses, farmers, service providers, government agencies etc. will also be impacted by the new tariffs and this has a flow on effect to the rest of the population.

As an example, I've already noted increases in the price of shorteats at various bakeries. Although the price of malu paan hasn't necessarily risen that much, some of the other shorteats have gone up significantly. This is basically, the bakery owner passing on the higher cost of electricity to provide these goods. Likewise, this applies to other retailers, businesses, hospitality etc. Where they can pass through a proportion of the increase to consumers, without losing any further business, they will action it.

Short term ways to reduce your electricity bill

I was talking with my adoptive Archi (i.e. grandma) recently. Well, we were actually having a broken "singlish" conversation. One of the topics we covered was the cost of living and how expensive things have gotten in Sri Lanka. She was remarking on how things used to be in Sri Lanka and what her parents taught her about being frugal (i.e. not wasting things). It got me thinking about what can be done in practice by household to assuage the electricity price hikes.

So here is my list on short term ways to reduce your electricity bill:

  • Turn off unnecessary lighting in your home - this is an easy way to be more eco-friendly and not use unnecessary power.
  • Replace light bulbs in your home to energy saving light bulbs or LED lighting - they tend to generally last longer and can save up to four to five times the amount of power consumed when in use.
  • Turn off the power at every socket and unplug when not in use - it would amaze you but if the power is on and you have an appliance (usually anything that has a transformer) plugged in, it is consuming energy. This includes radios, TVs, videos, DVD players, battery chargers, electrical razors, kettle, washing machine etc.
  • Use power strips or boards - this makes turning off a number of things easier. rather than going around the house, you can have three of four chargers on one power strip and you can turn them off with one single switch.
  • Unplug the rice cooker - don't leave this on for a few hours as some people do. Turning it off and unplugging it will save on power consumption.
  • Unplug the microwave - people often use the time setting feature as a clock on their microwave. The microwave consumes power if it's plugged in and you will save on your electricity bill if you stick to a clock rather than using this feature on the microwave.
  • Use short wash cycles when using your washing machine and don't overload the machine - long wash cycles will consume more power and hike up your electricity bill. Overloading the machine can reduce efficiency.
  • Ensure your airconditioner (if applicable) is the right size for your room - a unit that’s too big will result in reduced efficiency and higher electricity bills.
  • Set the airconditioner to minimum 26 degrees celsius. The lower you set your temperature, the more it will cost.
  • Convert to solar hot water system - hot water is not that necessary in a tropical country like Sri Lanka, however, it is a nice luxury. If this is applicable to you, converting to a solar hot water will entail an initial investment outlay, however, in the long term you will see the benefits over hot water using electricity.
  • Installing solar system / panels for your home - this can have significant savings after making an initial investment outlay for its installation. During daytime electricity that is produced will be used for the home and any excess can be given to the CEB. Additional energy that is sent back may be credited towards your next electricity bill.

If you find anything on this list useful, please share it with your friends, neighbors, family and colleagues so they can benefit as well... Times like this, we all need a bit of help.

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