PUCSL proposes 57% power tariff hike

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The Public Utilities Commission of Sri Lanka (PUCSL) proposed a 57 per cent increase in electricity tariff as a counter-proposal to the 82 per cent increase proposed by the Ceylon Electricity Board (CEB).

Accordingly, the Public Consultation Document with regard to the electricity tariff revision has been published on the PUCSL website and public could submit their written proposals by email or fax until 18 July, and details of the date and venue for the oral public consultation session which will be facilitated online will be announced in the due course.

‘’CEB is targeting an annual revenue of Rs 512 billion through this electricity tariff revision. However, the recommendation of the PUCSL is that the price of an average unit of electricity should not exceed Rs 28.14,’’ PUCSL Chairman, Janaka Ratnayake said.

He added that the proposal for electricity tariff revision has not in any manner been politically influenced and the revision will take place following public consultation and discussions with relevant stakeholders.

“There are 3.14 million household electricity consumers who consume electricity less than 60 units per month. It accounts for about 50 per cent of the total household electricity consumers. Therefore, PUCSL has recommended the Government to provide a subsidy of
Rs 65 billion to that category of consumers especially low-income earners,’’ he added.

Ratnayake observed 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 consumers more than 30 units and less than 60 units, will increase to Rs 1,488.

Ratnayake observed that 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 rupees and the average monthly electricity bill for consumers who consume more than 30 units less than 60 units can be maintained at Rs 658 rupees.

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

PUCSL also recommended for CEB to reduce their operating costs by 10 per cent by increasing its efficiency and to use that savings to get more renewable energy for the system. The PUCSL also observed that the conditions imposed on the CEB with the revision of tariffs in 2014 have not yet been fulfilled.

These include the implementation of a proper agreements to generate and supply electricity from power plants owned by the CEB, implementation of a proper agreement method for electricity transactions between the Transmission and Distribution Divisions (between licensees) of the CEB, introduction of a proper system for keeping separate accounts for the financial activities of the various divisions of the CEB (Generation, Transmission and Distribution) and determining the subsidy requirements and the 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 the said steps.

By Faadhila Thassim