By: Staff Writer
June 09, Colombo (LNW): Economist and Parliamentarian Dr. Harsha de Silva has strongly criticised the Ceylon Electricity Board’s (CEB) proposed electricity tariff revision for the second half of 2025, calling it fundamentally flawed and lacking transparency.
Speaking at the Public Utilities Commission of Sri Lanka’s (PUCSL) public consultation on 3 June at BMICH, Dr. de Silva dismantled several elements of the CEB’s financial assumptions, accusing the utility of misrepresenting its financial position to justify tariff hikes.
One of the key concerns raised was the CEB’s reported Rs. 144 billion loss for 2024, which, according to Dr. de Silva, includes a misleading Rs. 62 billion ‘clawback’—an advance payment collected from consumers.
Of this, Rs. 51 billion relates to the January-July period and Rs. 25.5 billion to the first quarter alone. “If these clawbacks are accounted for correctly, CEB would show a Rs. 7 billion profit in Q1, undermining their projected Rs. 42.2 billion loss for H2 2025,” he explained.
Dr. de Silva, also Chair of the Committee on Public Finance (CoPF), criticised the CEB for altering approved revenue figures mid-year—something he said is against standard financial practice. Expert analyses, he noted, also object to these revisions, highlighting that any such changes must follow proper regulatory procedures.
He further questioned the inclusion of a Rs. 14 billion finance cost in the tariff proposal, Rs. 5.2 billion of which stems from legacy debt under restructuring. “These historic debts should not burden current or future customers.
It violates the principle of cost causation,” Dr. de Silva argued, comparing it to previous government financial missteps that contributed to Sri Lanka’s Rs. 20 trillion debt crisis.
A major technical flaw, he said, is the CEB’s attempt to recover Rs. 8.3 billion in Q1 2025 losses by adjusting tariffs for the July–December period.
This approach, he warned, distorts established tariff methodology, which requires comparisons over matching timeframes—either quarter-to-quarter or half-year-to-half-year. “Mixing time periods misaligns the data and manipulates outcomes.
This cannot be accepted,” he said, urging the PUCSL to ensure consistency in any tariff adjustment model.
The CEB is currently facing financial strain, largely due to the 20–22% electricity tariff cut granted to domestic users from January to June 2025. It is now proposing a hike to recover losses, in line with the cost-reflective pricing model required under Sri Lanka’s agreement with the International Monetary Fund (IMF). This model ensures that any profits from January–June are returned to consumers, while losses can justify hikes.
Available data indicates the CEB posted a Rs. 51 billion profit during January–June 2024, and if current operations are compared year-on-year, it suggests the utility should generate Rs. 90 billion more this year. Based on this, Power and Energy expert asserted that tariffs should be reduced—not increased.
The PUCSL has asked the CEB to submit updated data on the Bulk Supply Transaction Bank Account (BSTBA) to assess its true financial state.
A final tariff decision is due by 1 July, in line with IMF structural benchmarks. Approval of the revised tariff is crucial for Sri Lanka to secure the next US$344 million tranche under the IMF’s Extended Fund Facility by June, as confirmed by IMF Mission Chief Evan Papageorgiou.
The IMF has also expressed concerns about the CEB’s financial health and the risk of further losses from past tariff reductions, adding pressure on both the utility and the regulator to get the numbers—and decisions—right.
