CEB to cut tariffs, off relief to low income groups
The Ceylon Electricity Board (CEB) is set to lower electricity tariffs as it continues to operate profitably under the direction of the president.
This marks the first tariff revision by the new administration, which will be finalised within the next few weeks. The revision aims to provide substantial relief to low and middle-income households, addressing public concerns about affordability.
The CEB has announced that it will submit revised proposals to the Public Utilities Commission of Sri Lanka (PUCSL) by next week.
Previously submitted proposals were returned by the PUCSL for revision, following concerns over transparency and fairness in the initial calculations. The commission had requested that the CEB address inconsistencies in the tariff adjustment formula before resubmitting it by November 8.
One of the PUCSL’s stipulations was for the CEB to offer consumers the option of receiving printed electricity bills, along with a directive for the CEB to finalise agreements with the Ceylon Petroleum Corporation (CPC) regarding fuel purchases for electricity generation.
The CEB sought additional time to refine its proposals, highlighting the complexity of adjusting tariffs to balance consumer needs and the board’s financial sustainability.
Despite rising fuel prices and operational costs, the CEB has managed to maintain profitability, which is a key factor behind the tariff reduction plan.
The tariff revision process is complicated by the need to recover costs while ensuring electricity remains affordable for all Sri Lankans, particularly amid the country’s economic challenges.
The tariff formula, governed by the PUCSL, is based on various cost components, including the cost of generation, fuel prices, transmission and distribution expenses, and capacity charges.
The formula is adjusted periodically to reflect changes in macroeconomic conditions, such as inflation and fuel price fluctuations. The formula’s limitations, especially its reliance on fossil fuels and the lack of flexibility to respond to rapid economic changes, pose ongoing challenges.
In 2024, the CEB’s revenue from electricity sales increased by 5.9 per cent, reaching Rs. 314.4 billion, driven by a 7.3 per cent rise in electricity demand.
However, its direct generation costs dropped by 32 per cent to Rs. 158.1 billion due to favourable weather and lower coal prices. As a result, the CEB reported a gross profit of Rs. 99.7 billion, a significant improvement from Rs. 17.8 billion in 2023.
Additionally, the CEB benefited from a Rs. 26 billion gain from selling shares in its subsidiary, Lanka Transformers Ltd, resulting in a net profit before tax of Rs. 119.2 billion for the first half of 2024, a sharp recovery from a loss of Rs. 13.7 billion in the same period the previous year.
The CEB’s improved financial performance provides it with the flexibility to lower electricity tariffs, which is expected to offer relief to consumers while ensuring the continued sustainability of the power sector.
However, balancing the need for affordability with the rising costs of energy generation remains a critical challenge for the utility.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!