Electricity Tariffs May Increase, Says Energy Minister Kumara Jayakody

Before coming to power, the National People’s Power (NPP), led by Anura Kumara Dissanayake, pledged to reduce electricity bills by one-third. Speaking at a public rally in Kalutara in August 2024, Anura promised, "We will reduce electricity bills by one-third within a very short period." He outlined plans to achieve this through eliminating corruption, reviving LNG power plants, and prioritizing renewable energy sources. After assuming office, President Dissanayake reaffirmed this commitment. In November 2024, at an NPP public meeting in Dambulla, he announced plans to cut electricity tariffs by over 30% within one and a half years, stating, "We will bring a major transformation to the electricity sector and reduce tariffs by more than 30%."

Previously, the Ceylon Electricity Board (CEB) justified tariff hikes by claiming financial losses. However, it was later revealed that the CEB had reported substantial profits. For instance, in the first half of 2024, the CEB recorded a profit of Rs. 119.2 billion, a significant turnaround from a Rs. 13.7 billion loss in the same period the previous year. This profit was primarily driven by high electricity tariffs imposed on consumers. In response to inaccurate deficit projections, the Public Utilities Commission of Sri Lanka (PUCSL) previously approved two rounds of tariff reductions. In the first quarter of 2024, PUCSL approved a 21.93% tariff reduction, followed by another 22.49% reduction in the third quarter. However, both reductions contradicted the CEB’s recommendations, which aimed to maintain higher tariffs.

By December 31, 2023, the CEB had covered all its commercial liabilities through the revised tariffs introduced that year. Furthermore, financial audits revealed that the total loan repayments for 2024 amounted to Rs. 63.9 billion, suggesting that the CEB could manage its financial obligations without burdening consumers further.

Despite these findings, the CEB and government ministers have asserted that a reduction in electricity tariffs would only be possible after three years. Like previous administrations, the new government has also delayed significant tariff reductions, citing financial concerns. However, due to PUCSL's intervention, the government was compelled to implement an overall 20% tariff reduction.

Now, the government is once again claiming financial losses in the electricity sector. Energy Minister Kumara Jayakody has stated that an electricity tariff hike is likely, arguing that despite reports of profitability, the CEB is actually incurring costs rather than generating profits.