Electricity Consumers Association fumes over giving monopoly hold to NFE on supplying LNG

By Ifham Nizam

The Electricity Consumers’ Association yesterday alleged that the US firm, New Fortress Energy, was gearing up to grab Sri Lanka’s natural gas reserves.

Association’s Secretary Sanjeewa Dhammika yesterday told journalists that the authorisation of an agreement for the supply of LNG without any legal background would not result in LNG price control and the American company would squeeze the country when opportunity came to sell gas at arbitrary prices.

Dhammika said that allowing a US company to monopolie the LNG supply iolated the rights of electricity consumers. Although the government claims that the monopoly would be limited to only five years, there is the danger of lasting indefinitely.

The Public Utilities Commission of Sri Lanka (PUCSL) has been empowered by the Electricity Act to ensure that electricity is supplied at the lowest possible price, and as a result, transactions that supply electricity at high prices are barred.

The Union pointed out that during the period of good governance, the illegal transaction of buying 600 MW of electricity from Turkish ships berthed at Sri Lankan harbours was avoided because the Public Utilities Commission had powers.

“But there is no agency with any legal powers to regulate LNG supply. In such a scenario, handing over the supply of LNG to a foreign monopoly would push the country’s energy sector into a major crisis,” he warned.

Dhammika said in a statement: More than 2000 MW of LNG power plants are to be constructed in the near future. Accordingly, nearly 50 percent of the installed capacity in the country will be supplied by these power plants. Giving a foreign monopoly the power to decide the fate of 50 percent of the country’s electricity supply will instead result in electricity being generated at the monopoly’s arbitrary prices. Also, as the existing power plants can be powered by diesel, the country will be further victimized by the diesel mafia by supplying diesel instead of LNG at the behest of the LNG company.

Accordingly, the loss to the CEB will be further increased by this illegal transaction. The diesel mafia in the guise of LNG will work to impose that burden on the consumer. Accordingly, laws should be enacted to regulate the supply of LNG and delegate regulatory powers to the Public Utilities Commission before handing over the supply of LNG to a foreign monopoly. Then suppliers should be selected to supply LNG on a transparent basis based on competitive tenders, added Dhammika.