Sri Lanka’s Public Utilities Commission (PUCSL) has mandated a 20% reduction in electricity tariffs starting January 17, despite resistance from the state-owned Ceylon Electricity Board (CEB). The decision follows the PUCSL’s assessment projecting a 44 billion rupee surplus for the first six months of 2025, a significant divergence from the CEB’s projection of only 2.3 billion rupees.
The PUCSL’s director of communications, Jayanath Herath, stated that the Commission’s assessment, based on 2024 data, showed the CEB could maintain operations without financial loss at the reduced rates. This analysis, combined with extensive public consultations across all nine provinces, influenced the Commission’s final decision. Initially, the PUCSL recommended an 11% tariff reduction but revised it to 20% after receiving public feedback.
Public Demand for Relief amid Rising Profits
The decision comes amid widespread public dissatisfaction with high electricity costs, which have strained household finances. Since December 17, the PUCSL collected over 400 submissions during public hearings, with most advocating for significant tariff reductions. The Ministry of Energy has stated that the new tariffs will be implemented by the CEB upon approval from the Ministry of Finance.
The CEB has faced criticism for opposing tariff reductions, citing potential financial losses. However, financial reports reveal a starkly different picture. The CEB’s profits have surged, with a reported 157.5 billion rupees in 2024, including a depreciation gain of 30.7 billion rupees. This marks a significant increase from 2023 profits of 70.3 billion rupees. Critics argue that these profits undermine the utility’s claims of financial distress and justify calls for tariff reductions.
CEB’s Financial Performance under Scrutiny
The CEB’s financial justification for high tariffs has faced mounting skepticism. Audit reports suggest that the utilities past financial losses have largely been addressed through government subsidies and previous tariff increases. In 2024, the government collected 578 billion rupees from consumers, prompting further scrutiny of the CEB’s financial practices.
Former Power and Energy Minister Patali Champika Ranawake highlighted discrepancies in the CEB’s narrative, noting that despite claims of financial strain, the utility has consistently posted substantial profits. For example, while the CEB proposed a modest 3.4% tariff reduction in early 2024, the PUCSL approved a more substantial 21.3% reduction based on public input and financial reviews.
Calls for Accountability and Fairness
Critics argue that the CEB’s inefficiencies and excessive charges should be addressed to alleviate the burden on consumers. On average, households have been charged an additional 33,000 rupees annually, with no tariff revisions implemented since 2013. Public sentiment strongly favors using the CEB’s accumulated profits to offset these charges and reduce electricity costs.
The escalating cost of living in Sri Lanka has intensified demands for accountability. Public opinion reflects a growing expectation that the CEB’s profits should benefit consumers. Despite claims of rising operational costs, audit findings reveal that many of the CEB’s debts have already been mitigated through financial strategies, including debt-equity conversions.
Moving Forward
As the PUCSL finalizes its report on tariff revisions, the CEB faces mounting pressure to prioritize public welfare over profit margins. The significant profits reported in 2023 and 2024, totaling 178.7 billion rupees, underscore the utility’s capacity to implement meaningful tariff reductions.
For many Sri Lankans, this issue transcends financial relief. It represents a call for greater transparency, efficiency, and fairness in managing electricity costs. The PUCSL’s decision marks a critical step toward addressing public grievances, but sustained oversight will be essential to ensure that the benefits of reduced tariffs reach the people who need them most
