Who pays God’s electricity bill?

Originally appeared on The Morning.

By Dhananath Fernando

Over the years, I have volunteered at a humanitarian organisation named CandleAid Lanka to help the poor. The organisation has a programme called ‘Gift a Meal,’ where we provide meals to selected vulnerable households. When these people receive meals or dry rations, they thank the organisation profusely. I have noticed that most families also thank whichever god they believe in, because poor people think it is their god who is giving them a meal through CandleAid. 

I shared this observation later during a dinner table conversation with CandleAid’s Founder, Captain Elmo Jayawardena, who, as usual, cracked a joke regarding my observation. He said: “God takes very good care of people who support CandleAid, because God is rational. God ultimately gets the credit for all the hard work we do, so he must be thinking that he will lose the people’s support on two fronts if he harms such people. Firstly, he will lose the credit he gets through CandleAid’s work, and secondly, people will lose trust in God, because if something happens to people who donate to these charities, others will wonder why generous people are not being taken care of by God. So any rational God would simply do everything to protect us.”

Captain Jayawardena of course did not mean any particular god or religion, but was simply sharing a light moment at a private dinner. 

Lower power tariffs for religious institutions 

There was a time when the high powers of the Ceylon Electricity Board requested the blessings of a rain god for uninterrupted power supply during the Yahapalana regime. Now, religious institutions have requested a lower tariff rate compared to the normal rate.

Let’s face the truth. Even if we provide low tariffs for religious institutions or ask them to pay high tariffs, it is the common people who will pay. If we provide a tariff concession, common people and businesses have to pay it as taxpayers. Someone has to bear the cost of electricity generation, transmission, and distribution. If we cross-subsidise religious institutions, it is ultimately the taxpayers who have to pay. If we ask religious institutions to pay higher tariff rates, these same common people have to pay, as devotees of the god they believe in. 

However, there is a significant difference in behaviour and impact of usage, although the end payer is the same. 

If taxpayers are asked to pay the subsidy for religious institutions, religious institutions have no motivation to reduce their usage, because the buying price is far less than the market price. Therefore, there is no motivation to save electricity. 

At the same time, the difference in treatment of one set of customers will create market distortions. It will also set a bad example and many other customer categories will make the same request. 

Moreover, even those who don’t use electricity at the religious institution have to indirectly pay for it through taxes, instead of spending the money on something productive. This will incentivise the religious institutions to continue using electricity without moving to sustainable energy sources. Even if the particular line ministry pays the electricity bill, it is ultimately the taxpayer who has to foot the bill. 

If the higher electricity tariff is borne by the religious institutions, even then the same taxpayers have to pay the bill, as devotees of the institution. But in this case, devotees who use electricity at the institution will be the ones to bear the cost, so they have a motivation to reduce their consumption. This will also incentivise them to look for alternative energy sources. 

Market reform for better options

Considering the political dynamics surrounding the tariff hike, it appears that once again electricity tariffs are becoming a political weapon as usual. Most likely this will block some electricity sector reforms. 

If there was a market system, there could have been a concessionary rate for religious institutions. For instance, if we had a few companies that undertook electricity generation and distribution, one of these companies may have offered an option for religious institutions to receive electricity at a concessionary rate as charity. 

For example, supermarket chains run various charity projects geared towards sustainability through their outlets. Telco service providers offer different services to donate money on a range of issues at a corporate level. 

Therefore, I believe that religious institutions should request for market reforms rather than tariff concessions, because it is more likely that they will receive a better offer from a market system than from politicians. 

Energy sector reforms should not only be about simple tariff hikes. When we approach an election, these same politicians will simply use the electricity tariff as a political tool, resulting in a bigger mess. The same will happen for fuel as well. 

In Sri Lanka, the culture of entitlement across all sectors is a genuine issue. This culture is not only present in requesting tariff concessions for religious institutions but also in requesting tariff protections for selected industries. On both occasions, the burden is simply passed on to the common man. When the same thing happens repeatedly, there is only one thing left for the common man to say: “God save us.” 

The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.