Sri Lanka’s looming electricity tariff revision has triggered a fierce national debate, with the Ceylon Electricity Board (CEB), regulators, and consumer groups clashing over whether another increase in power prices can be justified amid mounting economic hardship.
The controversy comes as the Public Utilities Commission of Sri Lanka (PUCSL) prepares to announce its final decision on May 9 following public hearings held at the BMICH earlier this week. At the center of the dispute are conflicting claims over the financial health of the state-owned electricity provider and the transparency of the pricing formula imposed under Sri Lanka’s International Monetary Fund-backed reforms.
The CEB insists that a tariff adjustment is unavoidable. According to projections by the National System Operator, the utility faces a deficit of nearly Rs. 38 billion during the second and third quarters of 2026. Officials attribute the shortfall to rising global fuel prices, reduced hydropower generation caused by dry weather, and technical failures at the Lakvijaya coal power plant.
Additional pressure has emerged from infrastructure losses linked to Cyclone Ditwah, which reportedly caused around Rs. 20 billion in damage to transmission and distribution networks. CEB officials argue that at least part of these recovery costs must eventually be passed on to consumers through revised tariffs.
The utility also cites longstanding debt burdens, including deferred fuel payments and mounting interest costs, as evidence that the electricity sector remains financially fragile despite earlier profits.
Yet critics argue the proposed increase is both unnecessary and unfair.
Consumer advocates and opposition voices point to previous CEB financial statements that reportedly showed surpluses exceeding Rs. 61 billion in 2023. Under PUCSL regulations, such profits are required to be “clawed back” and used to reduce future electricity charges rather than retained while consumers face additional increases.
The issue has become even more contentious after the Treasury pledged Rs. 15 billion in financial support to cushion the current deficit. Public interest groups argue that government subsidies, combined with carried-forward surpluses, should be sufficient to avoid burdening ordinary households already struggling with inflation and rising living costs.
Questions have also emerged about the efficiency of the CEB’s planning process. Energy experts speaking during the May 6 consultation accused the utility of consistently overestimating electricity demand while underestimating hydroelectric generation. Critics claim these forecasting errors artificially inflate the need for emergency thermal power purchases, which are significantly more expensive.
Environmental groups additionally criticized what they described as the CEB’s continued dependence on fossil fuels despite growing opportunities for cheaper renewable energy projects.
Public frustration was evident during the hearings, where consumer organizations demanded greater transparency in coal procurement contracts and the operational costs of individual power plants. Several speakers highlighted the social impact of repeated tariff revisions, noting that more than one million households have reportedly experienced electricity disconnections in recent years.
Despite the growing backlash, regulators appear likely to shield most domestic consumers from the proposed increase. Current recommendations suggest that approximately 95 percent of households and religious institutions could avoid higher charges through targeted subsidies.
The final ruling is expected to determine not only electricity prices for the coming months, but also public confidence in Sri Lanka’s broader IMF-backed economic reform program.
