News
CEB keeps regulator in the dark about huge profits
View(s):Expert says surplus enough to reduce tariff by as much as 20 percent
By Namini Wijedasa
The Ceylon Electricity Board (CEB) has projected a profit of Rs. 73 billion for this year in its internal approved budget but has forecast a markedly short surplus of Rs. 23.7 billion to the regulator, the Public Utilities Commission of Sri Lanka (PUCSL), to justify its request for a mere 3.34% reduction of the average tariff, documents show.
According to its approved budget, which the Sunday Times saw, the CEB’s operational expenses budget for 2024 has also ballooned from Rs. 97 billion in 2022 to a projected Rs. 164 billion in 2024—a nearly 70 percent increase. This excludes direct generation and finance costs as well as depreciation and taxation. In 2023, operational expenses were Rs. 112 billion.
The difference between the projected profit in its internal budget and the CEB’s submission to PUCSL is more than Rs. 50 billion.
Meanwhile, the CEB’s profits for last year are shown in official documents to be Rs. 61.39 billion. This is not carried over or reflected in any way in the tariff revision request presented to the regulator.
Energy analyst Vidhura Ralapanawe pointed out that the CEB requested an emergency tariff increase in October last year in addition to tariff revisions in February and July 2023.
“The CEB claimed that the drought would generate a loss for 2023,” he said. “But this was because it failed to understand how rainfall patterns change based on global phenomena such as El Nino, despite having operated a hydro-based system for more than 50 years,” he said.
“Looking at the CEB’s tariff submission to the PUCSL and the 2023 profits, it appears that tariffs can be reduced by about 20 percent, and at minimum, to reverse the October 2023 tariff hike, which is a significant burden to consumers and businesses,” he said.
“I hope the PUCSL will carry out its public duty by exercising appropriate due diligence to finalise the tariff by identifying the reasonable and efficient costs rather than merely rubber-stamping CEB, as it did in two out of the three tariff revision requests last year, making a mockery of the process and public consultations,” Dr. Ralapanawe said.
The financials of the CEB have been under a cloud in recent years, alongside overstaffing, employee benefits and other costs.
Power and Energy Minister Kanchana Wijesekera revealed on social media yesterday that the CEB Finance Division data showed that Rs. 12 billion worth of loan facilities had been extended to CEB employees; and “that two-thirds of the employees [sic] loan interest component is paid by the utility. This interest is recovered from consumer tariffs.”
The Minister has directed the CEB management to introduce a mechanism to recover the loan and interest from beneficiaries and not pass it on to consumers.
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