The Ceylon Electricity Board (CEB), which is being restructured to be more cost-effective, may incur around Rs. 37 billion in losses within the coming six months with the introduction of the new tariff revision last week, The Sunday Morning learns.
The total tariff reduction cost as proposed by the CEB for the next six months was around Rs. 10 billion, but the new tariff reduction approved by the Public Utilities Commission of Sri Lanka (PUCSL) will cost Rs. 47 billion, according to CEB Chairman Nalinda Illangakoon.
The PUCSL last week approved the reduction of electricity tariffs by 14.2% with effect from 1 July.
As per the PUCSL’s approved tariffs which are now in effect, electricity users in the category of 0-30 units get a 65% electricity tariff reduction, 31-60 units category get a 51.5% reduction, and 61-90 units category get a 24.5% reduction, while there is a 26.3% reduction for the hotel sector, 9% reduction for the industry category, 5% reduction for commercial buildings, a 16% overall reduction for the religious purpose category, and a 0.8% reduction for Government buildings.
The CEB had initially proposed a tariff reduction of approximately 28% for over 1.7 million domestic electricity consumers who fall under the consumption block of 0-30 units and a 10% tariff reduction for consumers under the 31-60 units category. The CEB has also suggested a 7% reduction for those in the 61-90 units category.
Accordingly, it was suggested to grant consumers under unit categories of 91-120, 121-180, and 181 and above a reduction in their total bill from 1 July of 5%, 3%, and 2% respectively.
Also, as per the proposed tariff revision suggested by the CEB for the second half of this year, the fixed charges of consumers who fall under the categories of 91-120, 121-180, and above 181 were to remain unchanged while the fixed rates of those who fall under 0-30, 31-60, and 61-90 were proposed to be reduced from the current rates of Rs. 400, Rs. 550, and Rs. 650 to Rs. 250, Rs. 500, and Rs. 600 respectively.
The unit category charges were proposed to be reduced from Rs. 30, Rs. 37, and Rs. 42 to Rs. 25, Rs. 36, and Rs. 39 respectively.
When questioned about whether the PUCSL had informed the CEB regarding the tariffs, the CEB Chairman stressed that as the regulator, the PUCSL had the legal right to introduce the tariffs and that it did not have to consult the CEB.
However, highlighting the tariff difference, he emphasised that this would negatively affect the board as well as the country. “We are looking forward to seeing how it will go,” he said.
Noting that the fuel price reduction in the world market was marginal, Illangakoon said that the CEB was however keen to pass on even the small benefits of those price reductions to the public.
“We are prioritising our consumers and we always try to provide them relief. But the board has to operate without making losses,” he said.
He recalled that from 2013 to September last year, the CEB had accumulated a loss of Rs. 447.5 billion. In 2022 alone, it had incurred a loss of Rs. 167 billion.
CEB was granted two electricity tariff revisions amounting to 75% and 66% during August 2022 and February 2023, respectively, by the PUCSL.
However, due to the absence of a cost-reflective tariff for more than 10 years until 15 February 2023, it is said that the CEB has been operating with continuous financial losses.
As per the statistics, the recorded loss amounted to Rs. 167 billion for 2022 and Rs. 30.7 billion for January and February 2023.