12 August, 2020

Blog

CEB’s Idiotic Tariff Structure

By Kumar David

Prof. Kumar David

The tariff structure used by the CEB for several years is plain stupid. The design folks must be afflicted with brain fever. I have complained often about invalid principles but neither Chairman, nor Board, nor GM, nor the dozens of DGMs have a clue. Now thanks to corona they are all up shit-creek and a Committee of Inquiry is looking into how the CEB shat on its own doorstep. Don’t worry, nothing will come of it, like every other Task Force. 

First, before giving you a real-world example let me start with stylised illustrations. 

In the old intelligent days, domestic tariff slabs went like this (illustration only):

First 50 units say Rs 5 per unit (kWh)

Next 50 units say Rs 10 per unit 

Next (that is 101 to say 200) units say Rs 20 per kWh

Next slab above 200 units say Rs 40 per unit

And so on with slab sizes and rates designed to earn the total revenue needed by the Corporation.

If you consumed 51 units your bill would be 50×5 + 1×10 = Rs 260.

If you consumed 101 units your bill would be 50×5 + 50×10 + 1×20 = Rs760.

If you consumed 201 units you pay 50×5 + 50×10 + 100×20 + 1×40 = Rs2790.

The Stupid Tariff that the CEB introduced a few years ago goes like this (stylised example):

Fist 50 units say Rs 5 per unit

Above 50 units but below 100 units you pay Rs 10 on all units

Above 100 but below 200 you pay Rs 20 per unit on all units

Above 200 but below say 400 you pay Rs 40 on all units. 

And so on, for example.

So, if you consume 51 units you pay 51×10= Rs 510 (Instead of Rs 260 in the previous scheme)

If you consume 101 units you pay 101×20 = Rs 2020 (Instead of Rs760 in the previous scheme)

If you consume 201 units you pay 201×40 = Rs 8040 (Instead of Rs 2790 in the previous scheme)

The marginal price of the 51-st unit is 510-250 = Rs 260 for just one more unit from 50 to 51. Wow!

The marginal price of the 101-st unit is 2020-(100×10) = Rs 1020 for the last unit from 100 to 101. Lunacy!!

The marginal price of the 201-st unit is 8040-(200×20) = Rs 4040 for just one last unit from 200 to 201. Jesus!!!

Here is a real-life case – leaving out Fixed Charges and subsidies to keep it simple – which came into the clear because of Covid-19 and curfew which kept the meter reader away for three months. Consumption at a real household from 14 April 2020 to 13 July 2020 (three months) was 303 units. The meter reader, poor sod, was at his wits end what to do, so he arbitrarily decided to make it 123 units 14 April to 13 May, 123 units 14 May to 13 June and 57 units 14 June to 13 July. Leaving out Fixed Charges again, the kWh charges worked out at Rs 1572 for the first 30 days, Rs 1572 for the second month and Rs 266 for the third 30 days. Total: Rs 3410 for 3 months 

That’s ok. The issue is not the amount but the irrationality of the method. If the meter reader’s subjective allocation between months had been different the charges could have been far different and the total absurdly higher or lower. If the entire 303 units had been assigned to one month the total would have been Rs 9211, if spread equally over the three months the total would have added up to Rs 3060. 

Domestic consumers all over the country are now up in arms about incoherent and absurd tariff policy. It took curfew to prove that the CEB’s tariff structure is trash. The correct tariff should be a flat equal kWh charge for all. Subsidising some users does not make sense. When the poor buy sugar or onions is the price different? Welfare should be direct, not mixed into tariff systems. It gives rise to scams as well. If you get your premises registered as two places you can get away with a lower combined bill. Under current CEB tariffs, 50 units each in two premises (upstairs and downstairs say) attracts a total charge of 2×234 = Rs 468 (including two fixed charges of Rs 60 each), but a single house using 100 units will pay Rs1586 (including a fixed charge of Rs480). Why the huge difference? Take two neighbours, one normal, the other is using a frequent metering scam, that’s what this shows. Throw out the CEB’s idiot tariff! Oh no forget it! The Task Force is not up to the task.

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Latest comments

  • 2
    0

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  • 7
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    When you consume 101 units you’d pay = 50×5 + 50×10 + 1×20 = Rs 770 (not Rs760).
    (I understand the oversight.)

    • 4
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      “Above 50 units but below 100 units you pay Rs 10 on all units

      Above 100 but below 200 you pay Rs 20 per unit on all units”
      I tremble to correct the good Professor, but I believe the above calculation was used only for a couple of years (2012/ 2014 ). CEB / LECO are back to the old system now.

      • 0
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        Part One
        .
        Yes, old codger,
        .
        Even a man as erudite, versatile, and brilliant as the good Professor can make a mistake. When it’s such an easy subject, we tend to get careless.
        .
        Even my comment was not made after careful reading; in fact, I took it on myself to comment after glancing at it for only half a minute. It may help somebody to work out the system that now prevails if I tell you about my April, May and June bills.
        .
        In April they’ve told me that it is only an “estimated bill”, for 91 units consumed in March, since the meter had not been read. My meter is supposed to have read 7018035 units, and that has been sent up only on the 23rd of May. I had had 661 rupees credit. Every month there now is a Fixed Charge of Rs 480. For my 91 units the charge has been Rs 1,422.63 and “they” claim that their cost has been Rs 1,750.84. So “they have lost Rs 328.21.

      • 0
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        Part 2
        .
        On May 23rd, they’ve estimated bill” 91 units again. I was now 2,184.25 in the red. For my 91 units in April, the same figures. I stubbornly refused to give the Rajapaksas any money. Then I had paid Five Thousand rupees on the 3rd of June.
        .
        The meter had been properly read on the 25th of June. It was then 7,338,832 units. I was therefore 3,932.70 in the red. However, the Rs 5,000 had been credited. So it is a credit balance of 1,067.30 that I had. For my 67 units in May, the charge was Rs 618 and 10 cents. So, at that point, I still had 449.20 credit. Today, on the 21st of July, the reading is 7,038,928 units. A person with the intelligence of rj1952 is likely to miss the first two digits as shown on my meter and see only 38928, which actually is all that the (Swabasha speaking!) meter reader will record if he reads it today.
        .
        So, I have used 96 units in 26 days, and my next bill is likely to be about 1,000/=
        .
        If comments don’t close I will submit further information from my June bill.

      • 0
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        PART THREE
        .
        Sanipa has a correct insight
        with his reference to buckets, but he hasn’t realised that in April and May they have resorted to “estimated bills” for every thirty day period instead of larger “buckets” – which I would prefer (perhaps a year, or even a decade), since I tend suddenly to disappear to the Western Province.
        .
        Marxist Kumar has not written this surprisingly muddled account (one doesn’t expect there to ever to be a muddle within his brilliant mind!) because he’s a Marxist, but because he realises that there should be rationality in all matters. And no subsidies. He has advocated increasing charges from poor people, who will probably ask “mekath samajawadiyada” (is this also socialism?) . In his case, he suddenly disappears to Hong Kong.
        .
        My meter has been read on the 27th of February, next on the 23rd of May (I hope that is right). Anyway, having undercharged me somewhat in March and April (both estimated usage), I have been billed for 110 units in June. Unusually for me, I had obeyed Gota in staying put in Uva for many months, leaving this salubrious climate only on the 10th of June.

      • 0
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        PART FOUR

        So, on the 25th of February I have been billed for only 67 units – the breakdown of that, which resulted in my being billed only Rs 618.10, will come in a day or two when the meter reader puts my July bill under the door.
        .
        This is how I have been charged for the 110 units that I have been billed for in May. The breakdown appears, computer printed, in the June bill:

        The dates are 31 days apart, therefore each “bucket” is 31 units.
        .
        The first 31 units @ 7.85 each = whatever (not given, but using my calculator – nowadays mobile phone for all of us) – Rs 243.35
        .
        The next 31 units – identical = 243.35
        .
        Units 63 to 93 (another 31 units -no “Mahadenamutta counting”) 31 units @ 10.00 each = Rs 310 (that I managed in my head, but my kids would probably need a calculator even for that.
        .
        17 Units only in the next slab @ 27.75 = 471.75

      • 0
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        PART FIVE
        .
        That should be Rs 1748.50 after the “fixed charge of 480 is added. That isexactly what is on the bill. Cost of supplying me with electricity has been 2,116.40. So subsidy has been 367.90 from my calculator. Hurrah! They claim to have subsidised me a further five cents. So, I could legitimately go to Diyatalawa and fuss about that.
        .
        The really heavy consumption for me is my old CFC filled Sisil fridge. When teaching essay writing, I ask supposedly intelligent adult students whether I’m hurting the environment by using that fridge. The idiot half say, “Yes”. Then I take pleasure in saying that the CFCs are perfectly harmless when still safely locked in my fridge. The guys who would harm the environment are the fellows who try to repair such fridges and, to a less extent, those who allow a huge build-up of ice around the freezer compartment.
        .
        I defrost about once a week, disobeying the instructions which came with my hair drier. Actually my main use for it is to blow a bit of hot air into the freezer section, so that defrosting takes less than ten minutes.
        .

      • 0
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        PART SIX
        .
        In the 21st Century
        any person with a modicum of intelligence should know that if you are heating for any purpose, including cooking (or using an air-conditioner – which only the disgusting stinking rich use) you’ve got to be mindful of the harm you’re doing to the environment.
        .
        I use electricity mainly to boil my water for drinking in Bandarawela, because of the tariff -structure. The most environment-friendly way would probably be the efficient use of firewood. I have foregone even facilities for such. Mea culpa maxima!
        .
        I use a hot-water pressure shower in Bandarawela, but not in Maharagama. I don’t think that such a shower is a prodigal habit. Microwave cookers are also a blessing – and it looks as though even those made thirty-five years ago are still working (my experience). They consume so little energy for warming food (not for cooking) that has been in the fridge. Eating that way (while cooking large quantities each time) definitely means saving energy.
        .
        Use only LED (Light Emitting Diodes) bulbs for lighting.
        .
        Use public transport. Give lifts to poor guys like me, once COVID-19 is under control.
        .

    • 2
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      Nathan

      “When you consume 101 units you’d pay = 50×5 + 50×10 + 1×20 = Rs 770 (not Rs760).
      (I understand the oversight.)”

      Has it got anything to do with his candidacy on the National List of the NPP (National People’s Power) for the 5 August General Election?

  • 2
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    Last week Prof. Kumar wrote CEB engineers are smartest people. This week he has changed his mind.

  • 2
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    A nutcase is the president who rules the entire country. How can CEB be the exception? We should be surprised if anything connected to the government works well in SL.

    Always breakdown!

  • 7
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    Dear Prof. KD,
    .
    Thanks again for your valuable articles. I instantly question what happened to other reitred professionals in this country ? Why cant they use their pen for the improvement of the awareness of gullible majority in this country ? Retired teachers, uni professors and other high officials – OVER TO YOU please wake up from your long slumber and join hand to improve the COMMNERs.. as it is the need of the hour. Longer you stay lethargic and indifferent, the higher the number of easy targets being grabed by Rajapkahe Manthra which is based on rebuilding their family instead of REBUILDING the torn nation.

    I think if any good minister would introduce good steps/systems/mechanisms replacing the prevailing ones, he or she would have been attacked verbally and even physically, as his generations would have been scolded for his birth. This was the case with former minister Mangala’s hearted steps for example regarding that ” formular for the prices of petrolium”: We the ones living in Europe are well aware of the fact, that is the best step a minister could implement to their people. But bitch s sons filled lanken society stood against it and mafia men overtook the power again, removed it fully today, not even a single person, or so called investigative journo would not have guts to raise the question.

  • 1
    1

    Dear Professor Kumar,
    .
    Every word of what you have written is true. Fortunately for me, overall, I benefit from the system!
    .
    In devising the system, the idea was that relief be given to the poorest people. You are a Marxist, and as with all Marxists, you try to see all problems from the poor man’s point of view. However, you have been honest enough to acknowledge that the system has gone too far, and scams are not only possible but actually take place with, as usual, the crafty rich benefitting.
    .
    The current system benefits me because I’m almost always alone in this Uva Province house of mine, while only my wife and daughter live in the house in the Colombo District. So, in effect, we have two units without belonging to the poorest and most vulnerable section of society.
    .
    Yes, when the meter-reader finally visited my house in May 2020, after the lock-down, he had assigned far too many units for that Month, and the details have been computer-printed in the June bill. For May, they have put me down to pay for 17 over-94 units at Rs 27.75. Crazy it is; I am going to be paying far too much on the May bill. I intend taking it to my billing people in Diyatalawa, to register my mild protest.

  • 5
    0

    I know that this rather absurd system existed some time ago, whereby the marginal price is absurdly large.
    I have suffered when the meter reader arrived a day after the usual day, because my consumption was borderline.
    But this has been rectified sometime ago I thought.
    My December 2019 bill was analyses as
    Units consumed: 1-32….33-64….65-96….97-128….129-185 (I consumed 161 units)
    Charge per unit:….7.85….. 7.85…..10.00…..27.75…..32.00
    My total bill was Rs 2990.05, and not Rs 5152 (161×32)
    For January 2020, the consumption was 185 units and the bill was 4014.40 (Rs 24×32 more than Dec 2019)
    *
    When did Prof David last pay his bill?
    It will be good practice to check facts before going on the attack.

    • 4
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      SJ,
      You are correct. That system was introduced and ditched by the MR govt. It also had fuel surcharges added on.

  • 1
    0

    The system of billing was in buckets of 30 coinciding with 30 days .
    I.e first 30 @ 7.85 next 30 at 7.85 and next 30 units at 10.00
    If the bill was not read for say 40 days then the bill will be buckets of 40.
    If it is read after 60,days it is in buckets of 60.

    I cannot understand as to what went wrong or why anything different was used .

    During COVID if bills were read after 120 or 150 days then the buckets should have been 120 or 150

  • 1
    0

    The low cost hydro electricity needs to be shared equitably by the domestic users. The cost of Up to 30 units of electricity is Rs 105. There are poor people who use one or two bulbs for whom this is adequate and within their meager income, to enable their children to study.

  • 1
    0

    I do not live in SL now so I am not sure if this is correct. There are some comments here saying it is and some not. But isn’t it a simple solution to average out the months for the months they have not read the meter ? or use some consumption guide either from national usage or the properties previous usage. ?

    In any case shouldn’t this be the task of CEB accountants, not the engineers? Most electric charges are there to dissuade excess usage of a precious resource. It promotes frugality vs spendthriftness. I see nothing wrong with either system.

    • 3
      0

      a*****
      Prof. David was right some years ago.
      Things have changed since.
      That simplifies the mystery.

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