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CEB delay forces consumers to grapple with high energy costs
View(s):By Nathara Abeywickrema
The Ceylon Electricity Board (CEB) has come under fire for delaying the submission of its tariff revision proposals to the Public Utilities Commission of Sri Lanka (PUCSL), a critical step in determining electricity tariffs for the coming year. The delay has fueled public frustration, particularly as consumers grapple with high energy costs amid economic challenges.
A senior official from the Ceylon Electricity Board (CEB), an official who requested anonymity, said that a fresh proposal for tariff revision is expected to be submitted by next week. The official also noted that recent heavy rains have significantly boosted hydropower generation, which will improve the country’s energy mix. The revised tariffs are anticipated to take effect from January onwards.
A fresh proposal for tariff revision is expected to be submitted by next week.
The CEB on Tuesday (26) slammed false claims about the tariff revision and proposed a 6%-11% reduction on October 24, 2024, based on forecasted expenses, income, and loan repayments from 2014-2022. The regulator rejected the proposal, requesting a revised plan for a tariff reduction starting January 1, 2025, and set a deadline for submission by December 6, 2024. The change in methodology for 2024’s first three quarters prevented any reduction in tariffs for the last quarter. The CEB also noted that loans were necessary due to delays in tariff revisions despite an approved approach.
Meanwhile, consumer advocacy groups have voiced concerns over the CEB’s delayed submission of rate revision proposals, which could postpone potential relief for electricity consumers. General Secretary of the Electricity Consumers’ Association, Sanjeewa Dhammika, emphasised the need for transparency and efficiency in the rate-setting process.
“The delay in submitting proposals directly affects the public,” Mr Dhammika said. “If the CEB truly has excess funds for bonuses, why is there a delay in passing on relief to consumers? The public deserves clarity and immediate action to ensure they benefit from any potential tariff reductions.”
Mr Dhammika also criticised the government for its lack of oversight, noting that delays in rate revisions disproportionately impact low-income households already struggling with high living costs.
The government has yet to establish a comprehensive plan to promote renewable energy in the country, despite the urgent need for sustainable solutions.
The association has called for immediate action, emphasising the importance of transitioning to cleaner energy sources to reduce dependence on fossil fuels and ensure long-term energy security. However, critics argue that any expenditure by a state-owned entity like the CEB indirectly affects consumers. They point out that financial mismanagement or unnecessary expenses could lead to higher tariffs in the long term.
The PUCSL has also expressed concerns about the delay, urging the CEB to expedite its submissions to ensure timely tariff adjustments. PUCSL sources indicate that the prolonged process could disrupt energy sector planning and financial forecasting for the year ahead.
The Director of Corporate Communications at the Public Utilities Commission of Sri Lanka (PUCSL), Jayanath Herath, explained that electricity tariffs are supposed to be set according to specific rules outlined in the Sri Lanka Electricity Act and a set of guidelines approved by the Commission.
However, the latest tariff proposal submitted on October 24, 2024, does not follow these rules in several important ways.
First, the rules state that tariffs should be based on expected future costs, but the proposal only uses actual costs from 2024 and does not include any estimates for 2025. Second, it is required that past cost changes both increases and savings are factored into the tariffs. Yet, the proposal does not pass on any savings from earlier periods to consumers. Finally, the guidelines specify that changes to distribution tariffs should be made once a year. The proposal, however, includes extra adjustments outside this schedule, Mr Herath added.
The official further noted that the CEB’s initial submission, which was on October 24, did not comply with the Tariff Methodology and contained numerous faults. The CEB admitted its errors and pledged to submit a fresh proposal within two weeks but failed to meet the deadline, requesting extensions multiple times, first until November 8, then to November 22, and later to November 28. Most recently, they requested another two weeks, with the new deadline now set for December 6.
He expressed that despite the CEB’s familiarity with the process, they took an excessive amount of time to forward the proposals.
Adding to the controversy, CEB trade union leader and National People’s Power (NPP) national list nominee Mr. Ranjan Jayalal recently called for bonus payments for CEB employees, arguing that these bonuses would not affect electricity tariffs. His remarks have sparked a heated debate, with many questioning the timing of such demands.
Speaking to the Sunday Times, Mr. Jayalal defended the call for bonuses, asserting that the CEB’s financial health allows for employee incentives without burdening consumers. Highlighting that the CEB recorded a net profit of Rs. 43 billion in 2023 and Rs. 161 billion in 2024, “The bonus payments are based on our internal financial structures and will not have any impact on electricity rates,” Mr. Jayalal said. He further argued that rewarding employees could boost morale and improve service delivery.
Consumer rights activists have called for greater accountability within the CEB. “The board must prioritize public welfare over internal benefits,” added Mr. Dhammika. “Delays in rate revisions and demands for bonuses send the wrong message at a time when public trust in state institutions is already low.”
Former PUCSL Chairman Janaka Ratnayake added that the generation cost of electricity has decreased from Rs. 50 to Rs. 28, and electricity tariffs should be reduced by at least 30% to pass this relief on to the public. He dismissed claims that tariff reductions are hindered by IMF conditions, asserting that the IMF does not interfere as long as the PUCSL operates within its mandate.
As the debate continues, both the CEB and the PUCSL face mounting pressure to resolve the issue promptly. The public, meanwhile, awaits clarity on whether they will receive much-needed relief or face further delays in tariff adjustments.
With the new year approaching, stakeholders agree that transparency and prompt action are crucial to restoring consumer confidence and ensuring a fair and sustainable energy sector.
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