• CEB writes to PUCSL on Rs. 32 Bn revenue deficit after last reduction 

In the wake of the Ceylon Electricity Board (CEB) having sought the approval of the Public Utilities Commission of Sri Lanka (PUCSL) to increase electricity tariffs, considering the income-related situation that has arisen with the tariff revision made in July 2023, the Electricity Consumers’ Association (ECA) has claimed that the CEB is preparing to increase electricity tariffs by 56%.

In a letter dated Monday (4), addressed to the PUCSL, which was seen by The Daily Morning, the CEB General Manager, Engineer D.P. Seneviratne had said that the CEB had proposed a 3.15% reduction in the electricity tariff for the period from July to December, 2023, but that the PUCSL had reduced the tariff by about 14.2%, curtailing a considerable amount of the allowed expenditure (approximately Rs. 33 billion) for the operations of the CEB for 2023. 

“The total projected revenue anticipated from electricity sales from CEB customers amounts to Rs. 600.67 billion (Bn) (with the other incomes of the CEB, it is Rs. 612.74 billion). Based on the revised generation dispatch, the aggregate expenditure for the year has been adjusted to Rs. 645.25 billion. Consequently, a deficit in revenue of Rs. 32.51 billion is anticipated by the end of the year 2023 (with the other incomes), if the existing tariff rates persist,” the letter read.

It was also mentioned in the letter that in accordance with the general policy guidelines for the electricity industry issued by the Government, it is stipulated that end user electricity tariffs should be cost reflective and that the general Treasury does not subsidise the operations of the CEB anymore. While it is also necessary to ensure a round the clock power supply in the country, the CEB has informed the PUCSL that the International Monetary Fund (IMF) programme for the Extended Fund Facility envisages that the CEB should break even in its operations by the end of 2023.

“Giving due concern to these facts, the CEB earnestly requests the Commission to take appropriate actions with immediate effect to fulfil the conditions given in the general policy guidelines for the electricity industry of the Government and Section 30(4) of the Sri Lanka Electricity Act, No. 20 of 2009 as amended,” the letter read. It also mentioned that the hydro-power generation in the country had gone down significantly due to the dry weather that prevailed in the country, and that the situation may continue as per the forecasts made by the Meteorology Department.

Commenting on the CEB's preparations to increase electricity tariffs, the ECA Chairman Sanjeewa Dhammika claimed that the CEB was preparing to hike tariffs by 56%. “Three tariff revisions have been made from August 2022, to date. If another revision is made in the coming months, electricity tariffs have been increased by 200% within the course of one year. The CEB and the Power and Energy Minister cannot revise electricity tariffs whenever they want. Only two tariff revisions can be made per year with the approval of the Cabinet of Ministers. Therefore, it is wrong for the CEB even to propose a tariff revision in this manner.”

The PUCSL had approved an overall 14.2% electricity tariff reduction with effect from 3 July 2023. The revision reduced the electricity tariffs of the category that consumes zero-30 units by 65%, 31-60 units by 51.5%, and 61-90 by 24.5%, and tariffs of the hotel sector by 26.3%, the industry category by 9%, commercial buildings by 5%, and religious places by an overall percentage of 16%.