CEB proposes to reduce electricity tariffs by 10-20 %

The Ceylon Electricity Board (CEB) has proposed to reduce the electricity tariffs by 10-20 per cent following its improved financial performance of first quarter this year, CEB sources revealed. 

The reduction in world coal prices and increasing of hydro power generation in the country’s energy mix coupled with the drop in electricity consumption due to tariff hike had enabled the CEB to bring down production cost, CEB Engineers Union President Dhanushka Parakramasinghe said.  

The state owned power utility has posted revenue of Rs. 179 billion in a first quarter 2024 amidst a reduction of 28 per cent in cost of sales, and a gross profit of Rs. 69 billion was recorded. The CEB had a gross loss of Rs. 17 billion in 1Q23, Finance Ministry data shows.

CEB’s operating profit was Rs. 97 billion compared to the Rs. 19.2 billion operating loss recorded in 1Q23.

This fiscal achievement was possible due to considerable contractions in distribution cost (56 per cent YoY), other expenses (32.7 per cent YoY), and administrative expenses (14 per cent YoY),

The process to reduce electricity tariffs will commence, following the submission of the proposal to the Public Utilities Commission and the revised electricity tariff will be announced in July.

All these electricity tariffs will be revised in accordance with the cost-reflective pricing formula in line with the structural benchmarks of the IMF stipulated under economic reforms programme, Power and Energy Ministry sources confirmed.

A senior official of the ministry noted that the CEB has taken into consideration the actual generation data, the actual price of inputs, the generation mix and the forecast for 2024 in fixing the electricity tariff without giving details of the electricity pricing formula.