News
Public Utilities Commission studying proposal for a new tariff increase
View(s):By Ishu Bandara
Director of Corporate Communications at the Public Utilities Commission of Sri Lanka (PUCSL), M. Jayanath Herath, stated that the commission has received a proposal for a new tariff increase and is currently studying and evaluating it.
Mr. Herath said that an increase cannot be implemented immediately, as the commission must first complete its study before a decision is reached.
He noted that the proposal was submitted because the utility providers’ costs have reportedly increased by approximately Rs. 34 billion.
“The Ceylon Electricity Board (CEB) has presented that their costs have increased by about Rs. 34 billion. So we are talking about an increase corresponding to that,” Mr. Jayanath said.
The National System Operator (NSO) is requesting a further 15% increase on April 6, 2026, to address revenue gaps and rising operational costs.
At the same time, for the second quarter of 2026 (April 1 to June 30), the electricity tariff increased by an overall average of approximately 10%, effective from April 1, 2026. While the Ceylon Electricity Board (CEB) had initially proposed a higher increase of 13.56% to bridge a projected revenue gap of Rs. 15.8 billion, the Public Utilities Commission of Sri Lanka (PUCSL) approved the lower 10% revision and as they said the increase is structured progressively to protect lower-usage households.
The proposed unit rate changes (based on the initial 13.56% proposal), which illustrate how the costs scale with usage, are as follows: 0–30 units: from Rs. 4.50 to Rs. 5.11 per unit; 31–60 units: from Rs. 8.00 to Rs. 9.08 per unit; 61–90 units: from Rs. 18.50 to Rs. 21.01 per unit; 91–120 units: from Rs. 24.00 to Rs. 27.25 per unit; 121–180 units: from Rs. 41.00 to Rs. 46.56 per unit; and over 181 units: from Rs. 61.00 to Rs. 69.27 per unit.
As reported to the Sunday Times, the primary reasons for adjusting the tariff include the CEB’s projected total costs of Rs. 136.5 billion for the quarter, while estimated revenue at existing rates was only Rs. 116.9 billion.
The revision accounts for fluctuating fuel costs, hydropower availability, and other operational expenses. Issues such as poor-quality coal and reduced output from the Lakvijaya power plant have forced a reliance on more expensive oil-based generation.
To mitigate the impact, the government has allocated Rs. 15 billion to provide relief specifically for consumers using less than 90 units.
As learnt by the Sunday Times, the Stakeholder Consultation Report for the second quarter of 2026 summarises feedback from over 250 participants, including industry leaders, SMEs, religious organisations, and individual consumers, who voiced concerns across five provinces.
However, the report also outlines the following key themes and observations.
Stakeholders urged the Ceylon Electricity Board (CEB) to align generation forecasts with meteorological data and investigate the 37 GWh reduction at the Lakvijaya coal plant, which was attributed to poor-quality coal and supply disruptions.
There was a strong call to prioritise solar, wind, and mini-hydro while reducing reliance on expensive fossil fuels like diesel and naphtha. Participants recommended establishing long-term Fuel Supply Agreements (FSA) to protect consumers from global price volatility and criticised the lack of proper agreements with the Ceylon Petroleum Corporation.
Also, stakeholders argued that VRS-related gratuity costs and non-essential infrastructure (like the “Vidulakapaya” building) should not be passed on to consumers.
They also advocated for island-wide smart meters and technical loss reduction.
They highlighted a demand for forensic audits and better cost control within the CEB’s successor entities to ensure only “prudent and efficient” costs are recovered through tariffs.
There was strong opposition to the 13.56% flat increase across all categories, as it disproportionately affects low-use households. Stakeholders requested lifeline tariffs for low-income earners and dedicated support for SMEs, agriculture, and export sectors to maintain international competitiveness.
In the meantime, the Central Bank of Sri Lanka (CBSL) noted that while cost-reflective pricing is necessary for IMF reforms, the increase must be managed to avoid breaching the 5% inflation target.
However, when the Sunday Times inquired from the general public, they expressed considerable fear about electricity cuts, as they are currently experiencing them in several areas of the country.
The union of the CEB also made a statement expressing such fears of electricity cuts after the New Year.
Energy Minister Kumara Jayakody stated on April 7, that the government has not implemented any official power cuts despite the ongoing energy crisis. The Minister emphasised that the intermittent disruptions reported by the public were solely due to electricity breakdowns and not scheduled power cuts.
He urged people and officials to avoid making “misleading statements” and argued that such short-term disruptions are a frequent experience and should not be labelled as power cuts.
While the Minister denied formal power cuts, union-aligned voices within the CEB describe the situation as a crisis caused by management errors and coal shortages, which the public is being forced to bear.
Reports from various parts of the island indicate that the public has been experiencing power outages lasting one or more hours daily.
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