News

Electricity tariff hike to be finalised next week

  • Aims to subsidise low-income earners through revenue from high earners
  • Treasury denies PUCSL’s subsidy request

BY P. Waravita

The Public Utilities Commission of Sri Lanka (PUCSL) will have a stakeholder meeting next week with the Ceylon Electricity Board (CEB), the Treasury, and the Ministry of Power and Energy, in order to finalise the new electricity tariff hike.

Speaking to The Morning yesterday (4), PUCSL Chairman Janaka Ratnayake said that following the public consultation about the proposed tariff hike, which was held last month, the PUCSL hopes to hold an all stakeholder meeting with officials from the CEB, the Treasury, and the Ministry, in order to explain the methodology for the hike, and to finalise it. 

“The current annual revenue of the CEB is Rs. 250 billion. The CEB requested that the hike serve to increase their revenue to Rs. 800 billion. We disagreed, and proposed Rs. 500 billion as the expected revenue. With that in mind, we held the public consultation process last month,” said Ratnayake. 

According to Ratnayake, the PUCSL is focused on two priorities, which are to ensure that low income earners and small and medium enterprises (SMEs) face only a minimum impact, whilst the CEB can generate money. 

“We need to especially look at the low income earners. Thus, we asked for a Rs. 65 billion annual subsidy from the Treasury Department, for the low income earners, but the Treasury refused the proposal, stating that they do not have the required fiscal space to accommodate it. Now, we are looking at how we can generate some revenue from high income earners to subsidise the low income earners,” said Ratnayake. 

Speaking further, Ratnayake noted that the “tariff should go up for the country to move forward”, adding that the CEB currently owes about Rs. 100 billion in liabilities to suppliers, including to hydropower and solar power generators. 

The public consultation on the proposed electricity tariff hike, convened by the PUCSL, took place on 28 July. Reportedly, many of the participants had stressed that an electricity tariff hike cannot be justified in the current climate, as the daily cost of living is at an all time high, with Sri Lanka facing its most serious economic crisis in history. 

The CEB currently generates electricity using mainly hydropower, solar power, and thermal power stations. This year’s dry season was particularly difficult for Sri Lanka, as the CEB had to rely on its thermal power stations to generate electricity, which proved to be a challenge due to the lack of foreign exchange to import fuel into the country. Therefore, the public faced 13 hours of power cuts per day, in March of this year. 

Commenting on the current generation, Ratnayake said that with the onset of the monsoon season, the CEB is using more hydropower for electricity generation which has reduced its generation cost significantly. 

“On Wednesday (3), the CEB did not use any thermal power to generate electricity, but only used hydropower and coal power,” said Ratnayake.