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Electricity tariffs likely to be hiked

31 Jan 2022

 
  • CEB senior official says tariff hike should be expected
  • PUCSL Chair says tariff revision necessary
  BY Pamodi Waravita Indicating a possible increase in electricity tariffs, a high-level official at the Ceylon Electricity Board (CEB) said yesterday (30) that the public should expect electricity tariffs to be increased, while the Head of the Public Utilities Commission of Sri Lanka (PUCSL), which regulates the CEB, said that electricity tariffs must be revised upwards. The senior CEB official pointed to the Treasury Department having to release Rs. 93 billion to the CEB to pay its debts recently as an incident that highlights the need for a tariff increase. “The tariff was last revised in 2014, and then, it faced a decrease. The consumers will have to expect a tariff hike this year as the cost of electricity generation is very high. Even recently, the Treasury Department was instructed to release Rs. 93 billion to the CEB to pay its debts to the Ceylon Petroleum Corporation (CPC). Ultimately, that money will also come from the public. It is more suitable if consumers also contribute to covering the cost at the time of consumption.” The official added that costs incurred by the CEB have already been informed to the PUCSL in 2021. Meanwhile, PUCSL Chairman Janaka Rathnayake also told The Morning yesterday that Sri Lankan consumers have been consuming electricity at remarkably cheap tariffs. “The CEB tariffs have not been increased in a long time and Sri Lankan consumers have been benefitting from the cheapest electricity tariffs in the region. However, with the financial crisis affecting every segment of the economy, and the CEB losing billions of rupees, it is necessary that we revisit and review the existing tariffs.” He added that the tariff review process is almost a three-month-long process, and begins when the CEB, as the transmission/distribution licensee, sends a proposal to revise the consumer tariffs, in terms of Section 30 (2)(b) of the Sri Lanka Electricity Act No. 20 of 2009. The PUCSL will then review the proposal and publish a consultation document carrying the cost forecast and the tariff schedule, seeking stakeholder comments. The PUCSL will then consult and discuss with the Power Ministry about policy guidelines with regard to the proposal, following which the final proposal will be published. Rathnayake added that electricity is currently supplied to the customers at a concessionary rate, but that the CEB is still owed about Rs. 43 billion from the consumer. Sri Lanka is currently in the midst of a power crisis, with Power Minister Gamini Lokuge and Energy Minister Udaya Gammanpila attempting to prioritise fuel for their respective power and energy sectors. The CEB has stated that the use of fuel to generate electricity has resulted in higher costs being incurred by the institution whilst the price of coal in the world market has also increased. Although the country is yet to face scheduled power outages, experts, engineers, and government authorities predict that scheduled power outages will be common in March and April once the drought worsens and the reliance on hydropower to generate electricity decreases.


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