Electricity tariff increase of 1.46 percent estimated for fourth quarter

A 1.46 percent increase in electricity tariffs will be needed for the fourth quarter of 2026, the Public Utilities Commission of Sri Lanka has said in its preliminary estimate. The figure is lower than the 2.88 percent initially projected.

The estimate was made after a review of the national system operator's revised bulk electricity supply cost submission. The total supply cost, put at Rs 134.16 billion in the original estimate submitted on September 4, was reduced to Rs 125.94 billion in the new submission dated October 7.

The main reason was a cut in the generation cost estimate, which fell from Rs 105.58 billion to Rs 98.31 billion, the Commission said.

The projected revenue deficit, initially assessed at Rs 4.44 billion, was brought down to Rs 2.25 billion after the Commission adjusted several cost items in its own estimate, and the required tariff increase fell accordingly. A Rs 669 million item and Rs 1.07 billion in debt repayment costs of the distribution licensee were removed from the cost estimate; spending on assets still under construction can only be recovered through the tariff once they are completed, the Commission explained.

The additional cost incurred in the second quarter from using substandard coal is among the items examined in the review.