Thursday, February 13, 2025
Households, hotels and industries to benefit

Power Minister greenlights PUCSL tariff reduction

by damith
January 19, 2025 1:20 am 0 comment 942 views

Minister of Energy, Kumara Jayakody said that the Government is committed to implementing the recommendations made by the Public Utilities Commission of Sri Lanka (PUCSL) to reduce electricity tariffs, marking the first step in a broader Government plan aimed at reducing tariffs by 30 percent over the next three years.

The reduction will benefit households, hotels, and industries alike, with the Government emphasising the importance of making electricity more affordable for all sectors. Minister Jayakody expressed optimism in a special statement issued yesterday recognising the relief this reduction will bring to the people.

“I am aware that a significant reduction in electricity tariffs will bring great relief to the people. I am pleased that, as a Government, we have been able to navigate these challenges and provide much-needed relief to the public,” he said adding, “I hope that all the people of the country, especially those in the hotel sector and industrialists will benefit greatly from this.”

The overall reduction in electricity tariffs, which is expected to be around 20 percent came into effect from midnight on January 17, 2025.

A spokesman for the Ministry of Energy said that the new tariff revision would be implemented by the Ceylon Electricity Board (CEB) after the PUCSL’s recommendations are officially received, following consultations with the Ministry of Finance.

According to the PUCSL decision, domestic consumers using less than 30 units of electricity will enjoy a 29 percent reduction, while those consuming between 31 to 60 units will benefit from a 28 percent cut. Consumers with a monthly consumption ranging from 61 to 90 units will receive a 19 percent tariff reduction, and those using between 91 to 180 units will get an 18 percent discount. For households, exceeding 180 units of consumption, the tariff reduction is set at 19 percent. The public sector will receive a 11 percent reduction, the hotel sector will enjoy a 31 percent cut, and the industrial sector will benefit from a 30 percent reduction.

Places of worship will also receive a 21 percent reduction in their electricity tariff.

The PUCSL’s decision to reduce tariffs follows its assessment of the CEB’s financial situation. According to PUCSL officials, a projected surplus of Rs. 44 billion permitted the Commission to approve the 20 percent tariff reduction, despite the CEB’s proposal to maintain the current tariff levels due to its own projection of a Rs. 2.3 billion surplus.

PUCSL’s Communication Unit Director Jayanath Herath said that the tariff reduction is not a mere recommendation but a final decision. He told the media on Friday that the reductions were based on last year’s financial data after conducting public consultations in all nine provinces across the country. “We decided that the benefit of this surplus should go to the public,” Herath said.

The public consultations gathered over 400 submissions, with most citizens advocating for significant tariff reductions. Many consumers were affected by the high cost of electricity, which exacerbated their financial difficulties. The CEB has also faced criticism for continuously opposing tariff reductions, citing financial losses. However, financial reports indicate the CEB’s profits surged to Rs. 157.5 billion in 2024, a significant increase from Rs. 70.3 billion in 2023. Audit reports have also stated that previous tariff hikes and Government subsidies have helped mitigate the utility’s past financial losses. In 2024, the Government collected Rs. 578 billion from consumers, raising further questions about the necessity of high tariffs.

The decision to reduce tariffs came amid widespread public dissatisfaction with soaring electricity costs, which have compounded the challenges of Sri Lanka’s ongoing economic crisis. In 2023, citizens faced a dramatic 66 percent tariff increase, deepening their financial strain.

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