The water from Upper Kotmale was released into the Kotmale Reservoir which is lower in the cascade and will be used for power generation there, he said.
There had been allegations that water was released for the benefit of thermal plants.
But engineers say the profits of thermal plants are decided by its capacity charge and energy charges are pass-through costs in most cases where the CEB re-imburses the power plant for fuel and lubrication used to generate energy.
Nihal Wickramasuriya, general manager of the state-run utility said water in the tunnel of the reservoir was released for inspection under the terms of the contractor who built it.
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"If we did not do it, the contractor will not take responsibility for defects," Wickramasuriya told a meeting of media heads in Sri Lanka with President Mahinda Rajapaksa.
Responding to a question from the President himself he said water is released first for drinking water, then for irrigation and lastly for power generation.
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