PUCSL approves CEB request for tariff increase to boost revenue

• Approves average 18% tariff hike across all categories from yesterday subject to conditions
• Move comes amid PUCSL acknowledging CEB has not fully complied with conditions set for tariff approvals granted in February and June 2023
• PUCSL establishes 13 conditions for tariff approval to ensure compliance and efficiency within CEB
• These conditions include measures related to independent audits, financial transactions, renewable energy obligations and more
• Domestic consumers will bear brunt of tariff hike, while industrial, hotel, general purpose, religious institutions also have an effect on
• CEB Senior Engineers’ Association claims if 14% tariff reduction in June 2023 had not occurred, SOE could have managed expenses without a special revision in October till January 2024
• Electricity users expresses disappointment in PUCSL’s decision to grant full 18% increase requested by CEB without addressing concerns raised during public consultations
• CEB United Trade Union Alliance alleges tariff hike will have a negative impact on overall economy, further burdening public and enterprises 

The Public Utilities Commission of Sri Lanka (PUCSL) approved the Ceylon Electricity Board (CEB) request to increase electricity tariffs by 18% on average for all categories from yesterday subject to several conditions, marking the third revision for 2023.

It was startling that the electricity regulator approved the tariff hike, when it has acknowledged that the CEB has not complied with all conditions specified in the tariff approvals granted on 14 February and 30 June 2023 that have not yet been fulfilled.

The regulator justified the move noting that it was to boost the revenue of the State-run utility — CEB cited the need to cover costs associated with power generation and losses. In an unconventional move, the CEB in September expedited its submission by bypassing the usual January cycle, aligning with a Cabinet decision, he said. 



The CEB’s request for the tariff hike was presented in an unconventional move in September, bypassing the usual January cycle, and aligning with a Cabinet decision. As per the least cost-based method, tariffs will be revised only in every six months in January and July.

As per the tariff revision, the bizarre fact of this hike is the domestic category is the most impacted, which has nearly five million followed by the industrial and hotel, general purpose and Government as well as religious and charitable institutions.

For the least usage groups of up to 0-30 units, 31-60 units and 61-90 units, the CEB has been allowed to increase by 16.6% for the monthly bill to be Rs. 180, Rs. 360 and 480 respectively. The usage groups of 91-120 units, 121-180 units and 180 units and above will be increased by 15.25% for a monthly bill of Rs. 1,180, Rs. 1,770 and Rs. 2,306 respectively. 

To ensure compliance and efficiency within the CEB, the PUCSL has set forth a series of conditions for tariff approval. These include: 

1. To conduct a comprehensive independent audit for the fourth quarter 2023 and report to the Commission - deadline by 31 January 2024
2. To establish a fully functional Bulk Supply Transaction Account (BSTA) - deadline by 31 December 2024 
3. To settle all outstanding dues in 2023 to Renewable Energy Generation Licensees - deadline by 31 March 2024 
4. To recognise the delay interest due under Standardised Power Purchase Agreements in the financial statements - deadline by 31 March 2024
5. To negotiate and enter into Fuel Supply Agreements with fuel suppliers - deadline by 31 December 2024 
6. To liberalise solar rooftop schemes by allowing unhindered transfer to and from different schemes -deadline by 31 March 2024
7. To remove location restrictions for Renewable energy and allow aggregation of consumer accounts (under the same prosumer) for Net Metering and Net Accounting contracts - deadline by 31 March 2024
8. To negotiate, restructure and reduce finance cost (interest rates) - deadline by 31 December 2024
9. To complete and commission the Kothmale - New Polpitiya 220kV Transmission Line - deadline by 31 August 2024
10. To submit a plan to reduce Transmission and Distribution losses over the next five years - deadline by 31 March 2024
11. To submit a plan to encourage energy conservation and efficiency (deadline by 31 March 2024)
12. To reduce employee costs – 

• No bonus or other incentive payments for employees for the year
• To ensure succession planning in the years ahead to eliminate/ reduce employee turnover
• Optimal utilisation of existing human resources and minimise new recruitments

13.To eliminate the waste and non-productive expenditure to minimise/eliminate such expenditure in the electricity supply cost

 

Separately, CEB Senior Engineers› Association Spokesman Nandika Pathirage said if the 14% tariff reduction was not imposed in June 2023, the utility provider could have managed the expenses without opting for a special revision in October till January 2024.

 “We all must remember that the CEB is a State-Owned Enterprise (SOE) and it is not making any profits. However, it is an essential institution and thus it needs to be operational,” he told journalists yesterday following the tariff hike.

In addition, the irked electricity users said they were disappointed with the PUCSL’s decision to allow the complete 18% requested by the CEB without considering any of the concerns raised during public consultations.

 “The written and verbal consultations concluded on 18 October were just another show to tick the protocols. The Commission has not considered any of the concerns raised by the electricity users,” they claimed.

CEB United Trade Union Alliance Convener Ranjan Jayalal said tariff hike will have no favourable impact on the economy; rather it would further burden the battered public and enterprises.