PUCSL to convene stakeholder consultation on proposed electricity tariff hike

• CEB proposes to raise its revenue by 66.2% via new tariff revision on top of 75% hike in August 2022

The Public Utilities Commission of Sri Lanka has decided to hold a stakeholder consultation on the proposed electricity tariff revision 2023.

The stakeholders and the public are invited to submit written submissions if any on the impacts or issues or information connected with the proposed tariff hike by the Ceylon Electricity Board.

The Commission noted that it may consider such submissions or any request by such parties if necessary to give oral or evidence at the stakeholder consultation.

On 10 January, the Cabinet of Ministers approved a proposal tabled by Power and Energy Minister Kanchana Wijesekera to amend the general policy guidelines for the electricity industry and implement a cost-reflective electricity tariff to be implemented from January 2023.

Despite the Cabinet decision, it was agreed by the Cabinet of Ministers that as the electricity regulator — the PUCSL will further study the proposed revision of electricity charges submitted by the CEB and if any revision is required, submit the same on or before 15 February.

As per the electricity regulator, the CEB has proposed to raise its revenue by 66.2% through this proposed tariff revision.

The Commission’s stakeholder consultation is as per Section 17 of the PUCSL Act No. 35 of 2002, on the proposed electricity tariff. The date time and venue of the oral consultation will be informed to the public in due course by the PUCSL.

PUCSL Chairman Janaka Ratnayake reiterated that there is no provision in the Act for interim tariff adjustment with ‘retrospective effect’. 

He insisted on factual information on the cost of fuel such as naphtha, furnace oil and diesel; key to determining a cost-reflective price mechanism. 

Total electricity users in Sri Lanka at present are 7.8 million, whilst 6.7 million of which are domestic users, 1.1 million are general purpose users and 1.4 million use below 30 units per month. A total of 1.7 million use 90 units, while 4.8 million use below 90 units each month.

Last week, the Cabinet Co-Spokesman and Minister Bandula Gunawardena told journalists that the revision comes on the premise that the CEB will provide an uninterrupted power supply.

Further details and consultation documents can be accessed and downloaded from the Commission’s website www.pucsl.gov.lk.

Since the last electricity tariff hike of 75% in August 2022, the Power and Energy Ministry has justified the proposal for another tariff hike because even at the current tariff level, the CEB will still incur a loss of around Rs. 287 billion in 2023. 

Cabinet-Appointed Committee on Power Sector Reform last year recommended the division of the Ceylon Electricity Board into 14 companies to take over the businesses of generation, transmission, distribution, and sale of electricity. The restructuring is expected to attract significant investments into the energy sector and replace the current monopoly held by the CEB.

Many believe that if the restructuring of the CEB is carried out correctly and transparently, it will serve as a model for numerous other loss-making SOEs that require quick reform.