The Public Utilities Commission of Sri Lanka (PUCSL) approved the new electricity tariff hike of 75 per cent which will be effective from today (9).
Accordingly, the PUCSL has rejected the Ceylon Electricity Board’s (CEB) proposal to increase electricity tariffs by 229 per cent, capping off tariff hikes at 75 per cent.
Chairman of the PUCSL Janaka Ratnayake said the PUCSL has imposed a number of conditions on the CEB for the rate hike. These include the opening of a bulk supply transaction account, conducting an independent dispatch audit for 2021, renewing and revising purchase and sales agreements and payment of interest for security deposits obtained from consumers.
Furthermore, the PUCSL had requested that no bonuses should be given for CEB staff until finances become stabilised.
Commenting on the new tariff revision, Ratnayake said, the PUCSL managed to keep the electricity rates at a stable level for the last nine years. He said with the increase in the cost of electricity generation, the CEB had submitted two proposals to the PUCSL to increase the tariffs by 183 per cent and 229 per cent.
“Both these proposals were not approved. I would like to point out that we have taken steps to increase a reasonable tariff rate instead. As per the provisions of the PUCSL Act, we have also sought public inputs before approving the tariffs. The Commission decided to approve a fair electricity tariff, taking all these public and other stakeholder comments into consideration. Although it costs 32 rupees to generate a unit of electricity at present, the entire cost burden is not imposed on electricity consumers to protect the majority of consumers in the domestic sector. The category with consumption less than 30 units will be charged 25 per cent of the cost,” he said.
Speaking further, he said they still get 75 per cent of subsidy and the consumers come under the category of above 31 units and below 60 units is charged 40 per cent of the total cost. He added they get a 60 per cent of subsidy and only 50 per cent of the actual cost is charged from the categoryof units above 61 and below 90.
“A 50 per cent of subsidy is also given to that category. Accordingly, I must emphasise 75 per cent of the electricity consumers are still being subsidised even with the new tariff revision. Steps have also been taken to encourage electricity consumers to promote renewable electricity generation with the tariff revision decision. During the public consultation on the tariff revision, the users of solarsystems pointed out that charging a monthly fee on their overall consumption is unfair.
Accordingly,the PUCSL decided that the fixed charges should be determined on the basis of net consumption after deducting the amount of electricity units generated from their total consumption. With that decision being implemented, the electricity consumers who own solar power systems do not have topay a monthly fixed fee if they generate electricity more than the consumption,” he said.
Speaking further, he noted 1,324 people and institutions had submitted comments and suggestions during the public consultation process of the electricity tariff revision, while 46 people participated in giving oral comments. The opinions presented by the public are majorly pointing out that there should be fairness in the electricity cost, the cost should be affordable and the need for electricity conservation.
“Considering the facts presented by the public, the new tariff revision was approved in accordance with the provisions of the Electricity Act. At the same time, we decided to impose conditions on the CEB to implement the suggestions that arose at the Public Consultation process. The conditions include conducting an independent audit has been specified with specific dates with regard to purchasing electricity. These conditions should be met by February next year. With that, the public can take action on the proposals made regarding the fairness of the electricity cost. Lanka Electricity Private Company (LECO) started paying interest for security deposits of electricity consumers last year. We decided that the Ceylon Electricity Board should also start paying interest on electricity consumer guarantee deposits from October,” he said.
Ratnayake noted that the new tariff revision has been prepared to provide relief to the hotel sectorand the industrial sector.
The revenue requirement, as filed by CEB, is Rs 505 billion (excluding LECO costs) requiring 82.4 per cent increase in revenue to recover the forecast cost for 2022. When the proposed Tariff revision is applied, the overall revenue increase is forecast at Rs 512 billion (including LECO sales) meaning a 79 per cent increase, he said.