COLOMBO – Sri Lanka’s state-owned power utility, the Ceylon Electricity Board (CEB), has proposed an electricity tariff increase of 11.57% for the first quarter of 2026, citing the need to boost revenues and partially recover losses incurred in the final quarter of 2025.
The tariff revision proposal, submitted to the Public Utilities Commission of Sri Lanka (PUCSL), estimates a revenue shortfall of Rs 13.09 billion for the period from January to March 2026, driven by a combination of operational, financial, and external factors.
In its filing, the CEB said the proposed increase was calculated after assessing fuel availability and global fuel prices, expected hydropower inflows, power plant maintenance schedules, projected electricity demand, interest rates, transmission and distribution adjustments, reconciliation of bulk supply tariffs (BST) from previous periods, and broader government energy policy objectives.
“Based on the above analysis, a deficit of Rs 13,094 million has been estimated for the period from January to March 2026, requiring a tariff increase of 11.57%,” the CEB said.
The utility noted that any deviation from the projected figures, whether an excess or a shortfall, would be adjusted through the Bulk Supply Tariff Adjustment (BSTA) mechanism and factored into subsequent tariff revisions.
According to the CEB, the proposed revision is aimed at ensuring the utility’s financial and operational stability, while safeguarding the reliability of electricity supply amid ongoing uncertainties in fuel markets and weather conditions.
Hydropower generation, a key cost-saving component of Sri Lanka’s energy mix, is expected to offer limited relief during the first quarter of 2026. Citing seasonal forecasts from the Department of Meteorology, the CEB said there was no clear or consistent rainfall signal at the national level for the January-March period.
“Accordingly, hydropower inflows are expected to be near normal on average, though subject to considerable uncertainty and short-term variability,” the utility said.
The CEB added that generation planning for the quarter had been prepared on the assumption of near-normal hydropower inflows, while factoring in downside risks in major hydropower catchment areas.
“Overall, the January-March 2026 period does not point to a strong hydropower advantage,” the proposal noted, underscoring the continued reliance on thermal generation, which is more sensitive to fuel price fluctuations and foreign exchange pressures.
Sri Lanka’s electricity tariffs have undergone multiple revisions in recent years as the country grapples with the fallout from the 2022 economic crisis, high debt levels, and efforts to restore the financial viability of state-owned utilities under broader fiscal reform programmes.
–ENCL
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