CEB is increasing tariffs, reportedly to pay employees who are leaving.

The Sunday Times newspaper reported that a proposal has been made to increase electricity tariffs from January to March 2026 to cover the cost of Rs. 11.554 billion required for the voluntary retirement of 2,158 employees as part of the restructuring process of the Ceylon Electricity Board (CEB). This retirement compensation package has been converted into a loan to be repaid over 5 years, and the CEB has requested permission from the Public Utilities Commission of Sri Lanka to recover the installment of Rs. 874.23 million due by March through consumer electricity tariffs.

According to this proposal, overall electricity tariffs are expected to increase by 11.57% during the January to March period, aiming to cover an estimated financial deficit of Rs. 13.094 billion. Under the proposed new tariff system, the price per unit for domestic consumers during peak hours (6:30 PM to 10:30 PM) will increase by 17.6% from Rs. 67 to Rs. 78.82, and the fixed charge is proposed to be increased from Rs. 1,200 to Rs. 2,470.34. The expected revenue for this quarter under the existing tariff system is estimated at Rs. 113.16 billion.

The CEB also points out that the cost of repairing the massive damage caused to the power system by Cyclone 'Dithwa' on November 27 last year is a major reason for this tariff increase. The total damage caused by the cyclone is estimated at Rs. 20 billion, and Rs. 7.016 billion of this cost is planned to be recovered during this first quarter. In addition, the outstanding amount of USD 1.8 million payable to the contractor of the Broadlands Hydropower Project and the loan installment of Rs. 2.725 billion for the Thambapavani Wind Power Project have also been included in these tariff calculations.

Under this voluntary retirement scheme, which operates under the plan to separate the CEB into four independent business units, each employee will receive compensation ranging from a minimum of Rs. 900,000 (9 lakhs) to a maximum of Rs. 5 million. Employees, including engineers and accountants, are expected to apply for this scheme and will also be entitled to Employees' Provident Fund (EPF) and Employees' Trust Fund (ETF) benefits. However, the CEB emphasizes that no employee retiring under this scheme will be re-recruited into the newly established government companies.

In January 2025, electricity tariffs were reduced by 20.08%, and then on June 12, they were increased again by 15%. In the nine months ending September 2025, the CEB generated an income of Rs. 311.4 billion but reported a loss of Rs. 9.5 billion. According to data presented by CEB General Manager K.S.I. Kumara on December 24, the financial cost until the upcoming March is estimated at Rs. 7.638 billion, and it was also mentioned that water levels in reservoirs are at a good level for electricity generation in the first half of the year. (Source: Sunday Times)