New electricity tariffs announced

The much-awaited reduction of electricity tariffs was given the green light on Thursday after the Public Utilities Commission (PUC) made several changes to proposals presented by the Ceylon Electricity Board (CEB).

In a letter released to the media, the commission noted that it had decided to approve an alternative tariff structure, based on the formerly employed increasing block tariff structure that can generate the same revenue to the CEB, while conforming to the Government policy declared by the President.

Under this new scheme there will be no tariff increase to domestic consumers having consumption below 60 units. In addition it includes concessions for domestic consumers consuming between 61-180 units per month, and relief for consumers falling at the block transition points (91-95 units a month).

Accordingly, there is no fuel adjustment charge for units between 0-60. However, 61-90 will have a 10% charge while all other brackets will have a 40% fuel adjustment charge. Units charge from 0-60 (Rs. 10), 61-90 (Rs. 12), 91-120 (Rs. 26.50), 121-180 (Rs. 30.50) and over 180 (Rs. 42).

“The commission strongly believes that this is the most appropriate solution at this point of time from the perspective of the Government, consumers, CEB and LECO. The Ministry of Power and Energy has already conformed the availability of funding at the Treasury to bear this subsidy, as a result of these concessions,” the letter said.

The PUC stressed that they had considered President Rajapaksa’s May Day promise along with the revenue requirement of CEB and LECO licensees, availability of additional funding requirement arising out of Government policy, acceptability of the tariff structure to all stakeholders and simplifying and reduction of tariff blocks before releasing the fresh structure.

The PUC came under heavy fire for its previous tariff structure, which critics insisted disregarded over 170 representations made by stakeholders. Subsequent to Rajapaksa’s promises the CEB formulated a second structure that was rejected by the PUC, resulting in the latest measures that have now been approved.



Highlighting the main reasons for the PUC’s about-turn, it pointed out that the unfair and very high increases at the block transition points, reduction of revenue from lower consumption, difficult calculation methods and unjustifiable increases at the start of a tariff block compared to the end of a tariff block were all negative points.