ECONOMYNEXT – Sri Lanka plans to hike power tariffs by 60 to 65 percent in January 2023 through cabinet approval to offset costs, officials said.
Sri Lanka’s Public Utilities Commission the regulator has not given sufficient increase in an August decision, General Manager of Ceylon Electricity Board, Rohan Seneviratne said.
Sri Lanka’s power regulator is usually expected to approve price hikes. However Prime Minister Ranil Wickremesinghe has said in parliament the Treasury has authority to do so.
“We will go cabinet on January 02, the price hike will happen legitimately and if anyone has the right to express their views and criticize the tariff raise, if they wish to they could even challenge it in court,” Minister Wijesekera told reporters.
“The cost is based on average rainfall. We still do have a forecast for rain next year. If there is more rain the coming year, we will reduce the price in the month of July.”
The price increase based on 27 of energy generated from hydro in 2023, 28 percent from coal, 13 percent from CEB’s liquid fuel plants, other private IPPs 12 percent, private renewables including 13 percent and 4 percent from rooftop solar.
Generation and distribution cost will be 48.42 rupees a unit. Last August the Public Utilities Commission had given only and increase of 29.14 rupees.
The revenue shortfall is calculated 277.5 billion rupees.
“The hike is to cover the gap,” Wijesekera said. “If not we will have to have more power cuts. The people asked for uninterrupted power. To do that we need to operate both CEB and private power plants.”
Sri Lanka expects to give some benefit to industries to maintain their competitiveness and also to low income households.
Low income households may be given cash grants, he said.
There is currently an effective subsidy of about 100 billion rupees to industries and 130 billion rupees to households he said.
“There are 14 lacks of customers using less than 30 units (a month), there 16 lacks using less than 60 units,” Minister Wijesekera said.
“We discussing with several agencies to give the cash grants. The government will give some support for their costs.”
For all religious institutions under an Indian credit line a 5kW of solar panels will be given. The plan would be done in the next three months. For small temples or others could reduce their bill to almost zero, with a 5kW panel, he said.