By: Staff Writer
May 18, Colombo (LNW): The Ceylon Electricity Board (CEB) has proposed an 18.3% increase in electricity tariffs for the period of June to December 2025, citing projected financial losses and the need to ensure the long-term sustainability of Sri Lanka’s power sector. The proposal has been submitted to the Public Utilities Commission of Sri Lanka (PUCSL) for review and approval.
The proposed hike has sparked widespread debate, especially in light of the CEB’s recent profitability. In 2023, the utility reported significant gains—Rs. 61.2 billion for the Board and Rs. 75.7 billion for the Group—primarily driven by reduced dependence on expensive thermal power due to improved rainfall and a steep tariff increase implemented in October 2023. The positive trend continued into 2024, with the CEB posting a first-quarter profit of Rs. 88.3 billion, marking a stark contrast to its Rs. 35.3 billion loss during the same period in 2023.
Despite the current proposal for a tariff increase, the PUCSL had previously mandated a 20% reduction in electricity tariffs effective from January 17, 2025. This decision was based on a projected Rs. 44 billion surplus for the first half of the year. Additionally, the Ministry of Power and Energy announced in December 2024 that electricity rates would remain unchanged through June 2025, citing sound financial management and the use of accumulated profits to offset an expected revenue gap of Rs. 39 billion.
However, President Anura Kumara Dissanayake recently signaled a shift in policy, stating that a tariff revision would take place on June 1, 2025. He emphasized the necessity of adopting cost-reflective pricing models in line with recommendations from the International Monetary Fund (IMF). The President also highlighted the CEB’s substantial legacy debt of Rs. 220 billion, confirming that a portion of this liability would be incorporated into the upcoming tariff structure.
The CEB argues that the proposed tariff adjustment is essential to address a projected deficit of Rs. 42.2 billion for the second half of 2025. According to the utility, the proposal was developed using a comprehensive analysis that considered current tariffs, fuel costs and availability, hydro inflows, future price trends, energy demand, infrastructure requirements, and macroeconomic conditions.
Under PUCSL’s tariff methodology, end-user electricity rates are based on the revenue requirements of the CEB, assessed through the Bulk Supply Transaction Account (BSTA). This financial mechanism helps track mismatches between revenue and costs, ensuring that future adjustments reflect the economic realities of the power sector.
The PUCSL has announced that it will conduct a public consultation process before reaching a final decision. The outcome is expected to be revealed during the first week of June 2025.As discussions unfold, the key challenge remains balancing the financial health of the CEB with affordability for consumers. While the Board cites pressing financial obligations and infrastructure demands, the public and regulatory bodies continue to scrutinize whether another tariff hike is truly warranted in light of recent financial surpluses.
