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Public Utilities Commission Chairman Janaka Ratnayake gestures during the briefing to the media yesterday on the upward revision of electricity tariff
By Charumini de Silva
The Public Utilities Commission of Sri Lanka (PUCSL) yesterday approved the Ceylon Electricity Board (CEB) request to increase electricity tariffs by 75% on average for all categories from today, after nine years.
The new tariffs are made according to the least cost-based method, subject to several conditions applied for the CEB to cover its costs and become a financially stable institution.
“Considering the affordability concerns raised by the stakeholders and the reluctance to provide subsidies by the Government, electricity tariffs were further revised incorporating both subsidies, cross-subsidies and demand management features reasonably and transparently to an average hike of 75%,” PUCSL Chairman Janaka Ratnayake told journalists yesterday.
He said the Treasury had already given Rs. 80 billion as a subsidy to the CEB this year and informed the Commission that there is no fiscal space to provide further subsidies during this year.
Govt.
“The CEB requested the Commission to raise tariffs by 229% to generate an income of Rs. 880 billion, but considering the ongoing power cuts, appreciating exchange rate, and fuel prices – the PUCSL cannot justify that steep tariff hike to electricity users. We hope the much-needed tariff hike will help the CEB to generate over Rs. 500 billion by end of this year and will not be in a dire financial position again,” he added.
As per the tariff revision, for the least usage of up to 30 units, the CEB has been allowed to increase by 264%, where the maximum electricity bill for the entire month would be Rs.198. The usage of 31- 60 units will be increased by 211% to a maximum monthly bill of Rs. 599.
The usage of 61-90 units will be increased by 125% for a monthly bill of Rs. 1,461, the usage of 91-120 units will be increased by 89% for a monthly bill of Rs. 2,976, and for the usage of 121-180 units will be increased by 79% for a monthly bill of Rs. 5,005.
“Overall, 75% of the electricity users are still getting a subsidy even under the new tariff revision,” PUCSL Chairman said.
Noting that the unit cost is Rs. 32 at present, he said the entire burden of the generation cost has been not imposed on electricity users to protect the majority of consumers in the domestic sector. “The category with below 30 units will be charged 25% of the cost, but they get 75% of subsidy. The category of 31- 60 units is charged 40% of the total cost, extending a 60% subsidy. Only 50% of the actual cost is charged from the category 61- 90 units,” Ratnayake explained.
Total electricity users in Sri Lanka at present are 7.8 million, while 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, he said.
Ratnayake also said instead of the 116% tariff increase proposed by the CEB for industries, hotels and general-purpose sectors with low electricity usage will get an approved tariff increase of 39% for the public sector and 75% for the industrial sector.
The tourism industry has been given an exception where the tariff hike will be imposed in two stages, considering its slow recovery process.
“Only 50% of the increase in the approved rates will come into effect from 10 August for the tourism sector. The remaining 50% tariff increase will be applied after three months (10 November), as an incentive and relief, facilitating the tourism industry to recover,” he explained.
The PUCSL Chief also said industry, hotel, and GP category users who earn over 60% of their revenue in foreign currency are required to pay their electricity bills in dollars converted at the buying rate declared by the Central Bank of Sri Lanka for the date at which the bill is settled. The electricity users who fall under this category will be extended a 1.5% discount on their bills and this scheme will be effective from 1 September.
The conditions imposed by PUCSL on the CEB for the tariff hike include; the opening of a bulk supply transaction account, conducting an independent dispatch audit for 2021, renewing and revising purchase and sales agreements, initiating payment of interest on customer deposits from 1 October 2022, and only charge a monthly fixed rate for retail consumers with solar rooftops under Net-Metering and for Net-Accounting schemes to charge a fixed rate applicable to their net imported electricity.
Ratnayake also said the Commission requested not to extend any bonus payments to CEB staff, till the organisation is financially stable.
