ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board is making the second tariff proposal of 2025 to submit to the regulator, Energy Minister Kumara Jayakody said as an International Monetary Fund review looms.
The IMF has said Sri Lanka was breaching a structural benchmark in the program after the regulator cut tariffs by 20 percent, which is likely to lead to losses by the utility and breaching a requirement for electricity to be cost-reflective.
Under the IMF program, the proposal to revise tariffs in April should have been submitted by January. An IMF mission is expected in Sri Lanka in April for a review.
Meanwhile, under the general guidelines for the electricity industry, tariffs had to be revised every three months, Minister Jayakody said.
“Accordingly, under the tariff methodology approved by the Public Utilities Commission, the tariff revision for the next quarter is to be submitted,” Minister Jayakody told parliament Friday, March 14, 2025
“Practically it takes some time for a tariff proposal to be made.”
Since the regulator ordered the tariff cut from January 18, the first month’s bill would be a composite of old and new tariffs. Only in March the CEB would know the actual effect of the tariffs as a calendar month.
“As a result, it is only by the end of March or mid-April, that it is possible to make a full assessment of the tariff change,” Minister Jayakody.
“After such a broad assessment, the CEB will make the submission for the second tariff adjustment to the Public Utilities Commission.”
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The CEB also made operational losses in the December quarter, on revenues earned before the tariff cut was made, interim accounts of the utility showed.
Global fuel and coal costs however are coming down as the US Federal Reserve tightens monetary policy, and the dollar strengthens.
The CEB is making the tariff proposal considering multiple factors.
These included revenue that is coming from the current tariffs, the cost of fuel, rainfall, hydro storage forecasts, generator maintenance, interest rates, economic projections, expected energy demand, matching to approved costs and government guidelines, Minister Jayakody said. (Colombo/Mar14/2025)
