• To write to CEB requesting absolute costs for energy sources 
• PUCSL Chair says revision cannot be backdated to 1 January
• CEB refuses to comment on retrospective application as it is a Cabinet decision

With the Cabinet of Ministers having approved the proposal submitted by the Ceylon Electricity Board (CEB) for a revision of electricity tariffs according to a cost-reflective pricing formula, the Public Utilities Commission of Sri Lanka (PUCSL) is to write to the CEB requesting for the latter to produce all absolute costs of power generating energy sources without profits and costs of administration, evaporation, and other such costs, following which an evaluation and public consultation will take place for the revision of the electricity tariffs.

Speaking to The Morning yesterday (10), PUCSL Chairman Janaka Ratnayake noted that while the proposal for the revision of electricity tariffs had been submitted to the PUCSL by the CEB on Monday (9) and is currently being evaluated by the PUCSL, the process of the cost-reflective tariff mechanism will begin once the CEB submits the said absolute costs.

“I would like to thank President Ranil Wickremesinghe and the Cabinet for considering a cost-reflective tariff mechanism per Section 30 of the Electricity Act. When speaking about cost-reflective tariffs, we refer to the absolute cost. We don’t consider the Rs. 410 that the CEB pays to the Ceylon Petroleum Corporation for diesel, as it includes the profit margin, the administrative cost, other finances, evaporation, and whatnot. We will not consider those in the future as the absolute cost to buy fuel. I am writing to the CEB to ask them to immediately produce all the absolute costs for coal, naphtha, furnace oil, and diesel. It is only once they submit the real costs that we can start the process of looking at the cost-reflective tariff mechanism.”

When queried by The Morning as to whether the proposal handed over to the PUCSL on Monday was that which was also presented to the Cabinet – which Ratnayake on a previous occasion alleged was not based on facts and figures – he stated that he was uncertain, as the proposal was still being evaluated by the PUCSL.

When The Morning also inquired about a timeline for the process of evaluation, Ratnayake noted: “There is a due process as we have to hold public consultations, obtain stakeholder proposals and advice, and conduct stakeholder meetings. All this has to take place. It doesn’t matter to us if anyone is in a hurry, because we approved a proposal for the increase of electricity tariffs four months ago and we don’t see any urgency for such at the moment.”

Speaking further, he said: “If there is a need for a revision, we will discuss with the public and the stakeholders. We are in a position to boldly revise the tariffs because we need to make sure that the electricity is supplied and that the CEB is looked after. We will make our decision without the influence of anyone. But we will make sure that the cost is fairly absorbed and distributed and that subsidies are given to the respective people. 

“Our stance remains unchanged irrespective of the Cabinet decision, and we are working according to the PUCSL Act and the Electricity Act. We will not ignore these Acts; instead we will work in line with them, and not by the decision taken by Cabinet. We will not implement anything that is illegal.”

Speaking of Cabinet approving an interim tariff revision effective from 1 January in accordance with the amendments to the public policy guidelines currently in force regarding the power industry, Ratnayake commented: “Under general policy guidelines, there is no provision for an interim adjustment of electricity tariffs. So, they cannot increase tariffs for a retrospective and retroactive effect. There is no such thing in the law. If the Cabinet can make such a decision, what is the need for a regulator?”

Meanwhile, with Cabinet approving an interim tariff revision effective from 1 January, and Ratnayake stating that such retrospective application was not legal, The Morning sought a clarification from the CEB in this regard. Speaking to The Morning, CEB Additional General Manager (Generation Division) and Spokesman Eng. Dhammika Navaratne said: “Since the electricity tariffs are subject to Cabinet approval, we cannot comment on it at the moment. Within a few days, we may comment on it.”

A statement issued by the Government noted that there is no other option but to revise the existing electricity tariffs in order to ensure a continuous electricity supply in the country while minimising the impact on electricity consumers as much as possible. 

Accordingly, the Cabinet had granted approval to proceed as follows: “The PUCSL will further study the proposed revision of electricity charges submitted by the CEB and if any revision is required, should submit the same on or before 15 February. Until then, the CEB and the PUCSL will jointly take the necessary measures to implement the electricity tariff revision proposed by the CEB with effect from 1 January as an interim measure in accordance with the amendments to the public policy guidelines currently in force regarding the power Industry. If the PUCSL submits any amendments, the CEB will take steps to implement those amendments and make the necessary adjustments to future monthly electricity bills.”