PUCSL Director Communications Jayanath Herath
- Move will see average reduction for all categories from today
- Domestic users see 20% average decrease, with low-usage households benefitting most with over 25%
- Hotels and industries get largest billing relief at 31% and 30%, respectively
- Public sector rates reduced by 12%, street lamps and State institutions receiving 11% cut
- Electricity regulator identifies surplus of Rs. 44.07 b, enabling tariff reductions despite CEB’s initial forecast of mere Rs. 2.34 b
- New framework incentivises renewable energy, increasing contributions from hydroelectric, non-conventional renewable energy sources
- Incorporates claw-back mechanism addressing inefficiencies, recovering underutilised amounts from past OPEX and CAPEX
- PUCSL Director Communications Jayanath Herath says CEB is obliged to comply with recommendations under Sri Lanka Public Utilities Commission Act
- Imposes several conditions for CEB including fuel supply agreement by March 2025, user consent for e-billing, adjusting fixed charges for prosumers based on net usage
In a much-anticipated announcement, the Public Utilities Commission of Sri Lanka (PUCSL) has reduced electricity tariffs by an average of 20% for all categories for the first six months of the year, starting from January 18, 2025.
This decision comes after delays in the third tariff revision of 2024 and followed public consultations and a review of proposals from the Ceylon Electricity Board (CEB). The PUCSL based the new rates on a cost-reflective method that ensures electricity remains affordable while helping the CEB reach financial stability.
Domestic users will see an average 20% reduction, with low-usage households benefitting the most, getting over 25% cuts. Hotels and industries will receive the biggest reductions, with rates dropping by 31% and 30%, respectively. Public sector rates have been reduced by 12%, while state institutions and streetlights will get an 11% cut. Places of worship and charities will see a 21% decrease.
Initially, the CEB proposed keeping the current rates for the first half of 2025. However, after reviewing CEB’s projections, the PUCSL suggested new rates in December 2024, which became the basis for this reduction.
Under the previous administration, electricity tariffs were revised quarterly, but in 2023, the structure was adjusted only three times and twice in 2024. This new revision, the first since July 2024, is seen as a vital move to reduce financial pressure on households and businesses.
PUCSL Director Jayanath Herath explained that the changes will significantly help low-usage households, making electricity more affordable for vulnerable groups. Industrial users, including those in hospitality and manufacturing, will also benefit, improving their competitiveness.
The decision was influenced by public consultations held between December 27, 2024, and January 10, 2025. Over 400 submissions called for tariff reductions between 20% and 30%, reflecting the need for affordable electricity amid economic challenges.
The PUCSL found ways to cut costs in electricity generation and operations, revising the CEB’s surplus estimate from Rs. 2.34 billion to Rs. 44.07 billion. This allowed for a significant 20.08% tariff reduction.
The new framework promotes renewable energy, prioritizing hydroelectric and non-conventional renewable energy (NCRE) sources to reduce reliance on expensive and environmentally harmful oil-based power.
Herath stated that the CEB must comply with the PUCSL’s recommendations as per the law. The PUCSL has also set conditions to improve the CEB’s efficiency, including finalizing a fuel supply agreement by March 2025, obtaining user consent for e-billing, and adjusting fixed charges for prosumers based on their net electricity usage.
