The Hon. Kumara Jayakody - Minister of Energy

¶ 01 Answers:

¶ 02 1. The CEB has submitted to PUCSL, under prevailing Acts and regulations, a proposal for the 2026 first quarter tariff revision, covering January–March 2026.

¶ 03 For that period, total estimated cost is Rs. 137,016 million: generation energy cost Rs. 83,504 million; capacity cost Rs. 17,318 million; allowed transmission revenue Rs. 5,819 million; finance cost Rs. 7,638 million; and allowed distribution revenue Rs. 22,738 million. Against this, estimated revenue under the prevailing tariff is Rs. 113,161 million. After accounting for a carried-forward revenue surplus of Rs. 10,761 million, the net deficit for Q1 2026 is estimated at Rs. 13,094 million, which is 11.57% of revenue.

¶ 04 To bridge this gap and ensure financial stability and uninterrupted supply, CEB proposes an 11.57% tariff increase for Q1 2026. CEB submitted this proposal to PUCSL on 24 December 2025. The final decision rests with PUCSL.

¶ 05 2. The CEB has not carried out an assessment of the impacts on low- and middle-income households, small businesses, and public institutions.

¶ 06 3. Our calculation that electricity bills could be reduced by one-third was made in early 2024, when the average unit cost was about Rs. 37 per kWh in July 2024. We set a three-year target to reduce the average unit price to Rs. 25. As of today, it has been reduced to Rs. 29. We are close to our target. We must now move from Rs. 29 to Rs. 25 by ensuring that the average purchase price of electricity henceforth falls below Rs. 25.

¶ 07 The Opposition Leader must understand that his friends and certain lobbies will no longer be able to sell power at excessively high prices. Our target is low-cost electricity for the people. With competitive and transparent tenders, we recently secured wind power at Rs. 12 per kWh, and battery storage at below Rs. 20 per kWh. Prices will fall further. We are not failing in our promise; the difficulty lies with those who lose extraordinary profits. We will bring the average price down to Rs. 25 soon—a 32% reduction from Rs. 37.

¶ 08 4. Given the disaster situation, we must restore normalcy as quickly as possible, working faster than usual. We have already published stakeholder consultations on the National Electricity Policy, together with the tariff methodology, on 19 December, with comments open until 09 January. This is a draft intended to be revised in line with submissions. We plan to extend public input in a second stage as required by law. The final policy document will be tabled in due course.

¶ 09 5. Government policy is to move to a cost-reflective tariff system. Consumers who impose higher costs on the system should pay more; each consumer should pay a price that reflects their cost impact. This cannot be achieved in a single day; the methodology to calculate cost impacts by consumer category must be progressively improved. The primary responsibility for such analysis rests with the PUCSL. While moving to cost-reflectivity, we will not, and have not, withdrawn necessary support to vulnerable consumers.

¶ 10 6. Given current conditions, electricity generated during the day must be consumed during the day; daytime generation cannot be shifted to night. Generators should be paid the daytime price for daytime energy; energy consumed at night should be paid for at the night price. This is basic physics and economics. Implementing this principle will reduce system costs. We will present the analysis. For rooftop solar, feed-in tariff calculations consider that all exported units contribute to the system; properly applied, no consumer will lose the expected economic benefit. Initially, this policy will apply to new rooftop solar systems. Please submit comments by 09 January; this is still a draft.

¶ 11 7. We intend to change procurement to obtain all new capacity on a competitive basis to minimize cost, replacing feed-in tariffs with competitive bidding already introduced. No curtailment is intended other than for genuine system-operator technical reasons. If you have comments on the draft, please submit them by 09 January.

¶ 12 In closing: this is not a final document. Our aim is a successful electricity policy—who drafts it is immaterial. What matters is delivering benefits to the people and ensuring the power sector is not a burden to the country.