• Domestic users with lower consumption to see significant hike
• Tariffs for religious and charitable institutions to increase 

Domestic users with lower consumption levels up to 90 kWh are likely to experience a significant hike in electricity bills from this month if the proposed new tariff mechanism requested by the Ceylon Electricity Board (CEB) is approved by the Cabinet this week, The Sunday Morning learns.

According to the electricity tariff proposal for 2023, seen by The Sunday Morning, the consumption subcategories of block 1 (0-30 kWh) under the domestic consumption category will see an increase of energy charges from the current Rs. 8 to Rs. 30 and block 2 (31-60 kWh) from Rs. 10 to Rs. 37 respectively. 

Further, the fixed charges for both block 1 and block 2 in the 0-60 kWh domestic category will increase from Rs. 120 to Rs. 400 and from Rs. 240 to Rs. 550 respectively.

It is understood that the new tariff proposal had recently been submitted to the Cabinet by Power and Energy Minister Kanchana Wijesekera as an annex dated 13 December 2022.

Meanwhile, religious and charitable institutions too will see a dramatic increase in energy charges per unit under subcategories of 0-30 kWh, 31-90 kWh, 91-120 kWh, and 121-180 kWh from Rs. 8, Rs. 15, Rs. 20, and Rs. 30 to Rs. 30, Rs. 37, Rs. 42, and Rs. 45 respectively. The fixed charges are to be increased to Rs. 400, Rs. 550, Rs. 650, and Rs. 1,500 from Rs. 90, Rs. 120, Rs. 120, and Rs. 450 respectively.

In the documents submitted by Minister Wijesekera to the Cabinet, seen by The Sunday Morning, he has informed the Cabinet that in the absence of a cost recovery tariff since 2014, the CEB has been continuously recording net financial losses annually and in these circumstances, it has been impossible to settle outstanding payments to Independent Power Producers (IPP), Non-Conventional Renewable Energy (NCRE) producers, and local/foreign material suppliers.

According to Minister Wijesekera, the situation has badly affected the Ceylon Petroleum Corporation (CPC) as it has become a burden to State banks, impacting the import of fuel needed for the CEB.

Wijesekera has further informed that it is imperative to recover the CEB from its debt-ridden state by making it a financially-independent organisation.

“Even at the current tariff level, the CEB is expected to incur a loss of approximately Rs. 282 billion excluding other income in 2023 and the actual status of CEB debts as of 31 October 2022 is Rs. 651.9 billion,” the Minister has stated.

It is also stated that the annual required total generation units are estimated at 16,520 GWh in 2023 without intentional power cuts. In view of the national economic requirements, cross-subsidies are to be maintained to the industrial sector and any identified tariff category as per the General Policy Guidelines until the year 2025.

As per the Cabinet paper and according to documents seen by The Sunday Morning, the estimated average selling price of a unit is Rs. 48.74 and estimated annual revenue is Rs. 727,212 million from the proposed tariff.

The average selling price at present is Rs. 21.07 per unit and annual revenue is Rs. 300,420 million. Under the present tariff mechanism, the average selling price in 2023 will be Rs. 29.14 and estimated income Rs. 455,699 million.

“The direct generation cost under the proposed tariff is 86% of the revenue collected and therefore a major portion of revenue collection will contribute towards covering the direct generation costs, which is unavoidable. However, the Ministry is taking concerted action to reduce corporate and overhead costs of the CEB,” Wijesekera has stated.

It is also expected that the electricity demand growth rate has a direct correlation to the growth rate of the country’s economy. If the GDP growth rate drops by 4%, the electricity growth rate may follow the same pattern and the required generation units for 2023 could be reduced to 16,500 GWh approximately.