• Solar power to 9,000 religious places from May, new connections on instalment basis

In light of the recent reduction of electricity tariffs by 21.9%, the Power and Energy Minister Kanchana Wijesekera, yesterday (7), urged service providers including businesses such as restaurants to reduce the prices of their goods and services in accordance with the reduction of the electricity bill.

Emphasising that although such parties almost instantly increase the prices of various goods and services when power and energy costs go up, he expressed concerns that there is a concerning lethargy when it comes to passing on the relief of reduced power and energy costs. In this context, he invited various parties such as the media to influence these parties to pass on the benefit of these reductions to the public, as it is not something that the Ministry of Power and Energy or the Ceylon Electricity Board (CEB) can do. In addition, with regard to the recent increase in the prices of food by restaurants, he explained that this increase was likely an attempt to keep food prices unchanged by first increasing the prices and then decreasing the increased prices following the reduction in electricity tariffs.

Wijesekera made these remarks during a press briefing held yesterday, where he spoke extensively of the circumstances that affect the decision regarding electricity prices.

He noted that with the profits made in the recent past, especially thanks to adequate rain, the CEB was able to cover around Rs. 270 billion of losses suffered in 2022. He shed light on the developments that created a suitable environment for the recent electricity tariff reduction. According to him, while increased rainfall has been a decisive factor in reducing the electricity tariffs, the economic revival which led to the strengthening and stabilising of the Rupee (against the United States dollar) and also decreased interest rates have been instrumental in reducing electricity tariffs. While the stabilisation of the Rupee had helped in terms of coal and fuel imports, he noted that the decreased interest rates have helped the CEB to obtain loans at lower interest rates.

“Every year, we took around Rs. 100-150 billion as concessions, did not make the necessary payments to the Ceylon Petroleum Corporation, and took unbearable loans from the two State banks. All these factors were taken into account when electricity charges were increased in February of last year (2023),” he explained, adding that depending on a multitude of factors, including the said ones, electricity charges were revised several times thereafter. He added that even though the prevailing circumstances helped reduce the charges, they will change from time to time regardless of elections.

During the press briefing, he explained that as per Sri Lanka’s agreements with the International Monetary Fund (IMF), a policy has been adopted to not facilitate any concession with the Government’s intervention to provide unreasonable concessions to State institutions through State banks. He observed that most consumers respect that decision, and that it is important to maintain that financial discipline.

“The main reason for reducing electricity charges was the decline in electricity generation costs. This must be maintained. Instead of the existing high-cost electricity generation plants, new, low-cost power generation or purchase methods have to be sought.”

Moreover, he said that solar power-based electricity generation will be given priority this year (in 2024), with the first phase of this programme slated to begin in May including with over 9,000 religious places. This, he stressed, is expected to reduce the burden of the electricity charges on consumers.

Meanwhile, addressing Parliament yesterday, he stated that electricity consumers will be allowed to pay for new connections on an instalment basis. According to him, consumers will be allowed to pay 25% of the connection fee upfront and the remaining amount in 10 or 12 instalments, while the CEB is currently working on introducing this facility to consumers.