Will the Government Allow the PUCSL to Make Significant Electricity Tariff Adjustments

The Public Utilities Commission is set to release its final report today on the proposed electricity tariff revision. The Ceylon Electricity Board had previously suggested that tariffs remain unchanged for the next six months. However, the PUCSL has counter-proposed a different approach.

Prior to assuming power, the National People's Power (NPP), led by Anura Kumara Dissanayake, had pledged to reduce electricity bills by a third. During a public rally in Galle in August 2024, Anura stated, "We will reduce electricity bills by a third in a very short time." He outlined plans to achieve this by eliminating theft, reactivating LNG-powered power plants, and prioritizing renewable energy sources. Upon assuming office, President Dissanayake reiterated this commitment. In November 2024, at an NPP public gathering in Dambulla, he announced plans to reduce electricity tariffs by more than 30% within the next eighteen months, assuring the public, "We will bring a major change to the power sector and reduce electricity bills by more than 30%."

However, concerns about electricity tariffs persist. While the CEB previously projected losses to justify tariff hikes, it eventually reported significant profits. For instance, in the first half of 2024, the CEB recorded a profit of Rs. 119.2 billion, a substantial turnaround from a loss of Rs. 13.7 billion in the same period the previous year. This profit was largely attributed to the excessive tariffs imposed on consumers. The clear practice of making false forecasts about future losses to justify overcharging consumers has been exposed. After reviewing the data, the PUCSL had previously granted approval for significant electricity tariff reductions on two occasions. For example, in the first quarter of 2024, the PUCSL approved a 21.93% tariff reduction, and in the third quarter, a 22.49% reduction, both of which contradicted the relief proposals made by the CEB.

An audit revealed that the CEB had covered all trade payables as of December 31, 2023, with the electricity tariff revisions made in 2023, and that the debt repayments due in 2024 amounted to Rs. 63.9 billion. This indicates that the CEB can manage its financial obligations without further burdening consumers.

The PUCSL is now considering these facts and is likely to recommend significant electricity tariff reductions. However, the National People's Power government, which has delayed tariff reductions and is now attempting to take control of the PUCSL by delaying the appointment of its members, may undermine the commission's authority. Currently, the PUCSL consists of only two members, raising concerns about government interference.