JAAF requests PUCSL to reassess approved off-peak electricity tariff rates

• Says finalised off-peak and daytime industrial electricity tariff rates are exponentially high and detrimental to apparel industry
• Stresses reassessing newly revised tariff rates essential for companies within sector to plan and budget better

With the Public Utilities Commission of Sri Lanka (PUCSL) granting permission to the Ceylon Electricity Board (CEB) to increase the power tariffs, the off-peak and daytime tariff applicable to industries has increased exponentially. 

 
The initial proposal by the PUCSL suggested the off-peak industrial electricity tariff be increased from Rs.6.85 to Rs.14.50 and the daytime tariff be increased from Rs.11.00 to Rs.18.50. 

In response, the Joint Apparel Association (JAAF) had submitted counter proposals at the stakeholder consultation, identifying the 113 percent increase in off-peak industrial electricity tariffs to be extraordinarily high and detrimental to the industry.  The JAAF suggested implementing the final tariff increases in two phases, with the proposed rate being reduced to approximately 50 percent in each phase. However, the JAAF made no counter proposals for the suggested modest revisions for daytime tariffs, as the industry understands that these revisions are mandatory to rectify the massive losses incurred by the CEB.    

Alarmingly, despite the cautions highlighted by the JAAF, the approved off-peak and daytime tariffs are higher than those initially proposed for the category. Moreover, much to the industry’s surprise, the revisions made to daytime tariffs are three times higher than the rate initially proposed. 

The JAAF said the apparel industry is concerned over the finalised industrial electricity tariff rates, as they have overlooked the needs of the apparel industry and the suggestions made by the JAAF at the stakeholder consultation on behalf of the industry.

 The JAFF pointed out that the increase in off-peak tariffs defeats the very purpose of having an off-peak slab, which is to incentivise the businesses to operate during off-peak hours. 

“This move will further add to the industry’s operational costs, compelling the industry to bear higher off-peak staff costs. Moreover, energy-intensive businesses such as the textile industry operate on a 24-hour cycle. An exponential boost in off-peak tariff rates will result in a disproportionate increase in tariff costs for the industry, making business operations infeasible and non-viable,” the JAAF noted.

 “An exponential increase in both off-peak and daytime tariff rates will also increase overall industry costs and will adversely impact the JAAF’s strategy to drive Sri Lanka’s annual apparel export earnings to US $ 8 billion by 2025. This will prove to be harmful to Sri Lanka’s already fragile economy, hampering value addition and export diversification,” it added.  Hence, the JAAF urged the PUCSL to reassess the exponentially high off-peak and daytime industry tariff rates and to consider the submissions made against the initial proposals. Urgent attention to this matter is vital to enable the companies plan and budget better, as this will enable the apparel industry to continue supporting the revival of the country’s economy.