Electricity Reform: The Act and the Amendment

It will not be an exaggeration to say that what the 2024 Electricity Act proposed, the 2025 Amendment seems set up to depose. Equally, what the Act set about to depose, the Amendment is seeking to re-propose. Unrestricted unbundling and privatizing the unbundled parts were the central purpose of the Act. Controlled unbundling without abandoning public ownership seems to be the main motivation behind the Amendment.

- BY RAJAN PHILIPS

The Act exclusively privileged everyone else except engineers to carry the burden of reforming the electricity sector. The Amendment reverses that privilege and includes mostly engineers with limited participation by other experts. Apart from policy specifics and technical details, it is unfortunate that the Act and the Amendment have singularly failed to find a balance between divergent approaches to electricity reform but have instead created unnecessary dichotomies between them.

The electricity sector in Sri Lanka has a record of impressive achievements, as well as incredible failures. There is general acknowledgement of the achievements in the technical assets of the electricity sector in hydropower generation, its transmission grid that spans the whole country, improvements in supply efficiency, as well as in expanding accessibility to virtually every household. In a Sunday Island interview (July 20), Ashish Khanna, the new Director General of the International Solar Alliance (ISA), made a point about Sri Lanka's “almost universal energy access” in comparison to other parts of the world.

But these achievements have not come about in the most optimal ways of cost and efficiency, and maintaining them and transitioning them to expand the use of renewable energy sources have become virtually impossible in the absence of cost-based pricing for electricity consumption and the lack of capital for future investment. The advocates of the 2024 Electricity Act want the status quo overhauled because it is based on “a State-owned, vertically integrated monopoly with poor efficiency, management practices and technology.”