CEB seeks 82% increase in tariffs

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The Ceylon Electricity Board (CEB) has sought the approval of the Public Utilities Commission of Sri Lanka (PUCSL), the electricity sector regulator, for an 82% increase in tariffs for 2022.

However, the PUCSL is of the view that the tariff increase should not exceed 57% as a concession to the majority of household electricity consumers.

PUCSL Chairman Janaka Ratnayake said there are 3.14 million of household electricity consumers who consumers electricity less than 60 units per month, which accounts for about 50% of the total household electricity consumers.

“Therefore, the Public Utilities Commission of Sri Lanka has recommended to the Government to provide a subsidy of Rs. 65 billion to that category of consumers,” he said, claiming that by providing this subsidy, the CEB will be able to avoid a large increase in tariffs for the category who consumes less than 60 units per month.

“According to the CEB proposal, the average monthly electricity bill for the category who consumes less than 30 units will be increased to Rs. 507. The average monthly bill for those who consume more than 30 units and less than 60 units, will increase to Rs. 1,488. As a result of this subsidy, instead of such a tariff increase, the average monthly electricity bill for consumers below 30 units can be maintained at Rs. 227 and the average monthly electricity bill for consumers more than 30 units less than 60 units can be maintained at Rs. 658,” he explained.

The PUCSL points out that although a 138% tariff increase has been proposed for the entire domestic sector, it should not exceed 67%. The CEB has also proposed to increase electricity tariffs by 45% for general purpose consumers, 61% for industrial consumers, 43% for hotels, 43% for government agencies and 189% for places of worship.

The CEB targets to increase the average price of a unit of electricity by 82% from Rs. 18.14 to Rs. 32.48, according to the proposed tariff revision.

Explaining further about the above Ratnayake said, “The Ceylon Electricity Board is targeting an annual revenue of Rs. 512 billion through this tariff revision. However, the recommendation of the PUCSL is that the price of an average unit of electricity should not exceed Rs. 28.14. We also recommend that the Ceylon Electricity Board should reduce their operating costs by 10% by increasing its efficiency and use that savings to get more renewable energy for the system.”

In addition, the PUCSL has observed that the conditions imposed on the CEB with the revision of tariffs in 2014 have not yet been fulfilled. Those conditions were:

  1. Implementation of a proper agreements to generate and supply electricity from power plants owned by the Ceylon Electricity Board.
  2. Implementation of a proper agreement method for electricity transactions between the Transmission and Distribution Divisions (between licensees) of the Ceylon Electricity Board
  3. Introduction of a proper system for keeping separate accounts for the financial activities of the various divisions of the Ceylon Electricity Board (Generation, Transmission and Distribution) and determining the subsidy requirements.
  4. Introduction of an independent audit system for the process of purchasing electricity

The PUCSL points out that the cost and efficiency of the CEB could not be properly identified due to the failure of implementing above steps.

The commission also requested the CEB to accept the monthly electricity bills in dollars from the companies who earns their income in dollars.