Apparel industry welcomes recent revisions to electricity tariffs

• JAAF commends revisions made to off-peak industrial electricity tariffs
• 9% industrial tariff welcomed; JAAF hopes for higher reductions

The Joint Apparel Association Forum (JAAF) yesterday welcomed the recent revisions made to electricity tariff for the July - December period by the Public Utilities Commission (PUCSL).  

JAAF specifically welcomed the revisions made to the off-peak industrial electricity tariffs, as tariff revisions that occurred in mid-2022 and earlier this year overlooked industry submissions and concerns, severely increasing costs of operation, risking unemployment in off-peak hours, hampering the apparel industry’s competition in the region and overall sustainability. 

In 2022, the off-peak rate increased from Rs.6.58/ kWh to Rs.15/ kWh. Earlier this year, an off-peak increase of Rs.34/kWh from Rs.15 was initiated which resulted in a 400 percent increase in electricity tariff rates in just 12 months. 

As highlighted in the JAAF submissions to the PUCSL last week, Sri Lanka had one of the highest industrial tariffs in the region. This posed a significant threat to the industry’s competitiveness in the region and ability to attract investors at a time the island’s economy is in dire need of foreign exchange. 

In this backdrop, JAAF commended the electricity regulators’ decision to reduce the industrial tariff including the off-peak industry electricity tariff to 29/kWh, allowing the industry to sustain off-peak operations and employment. 
The new revisions have reduced overall industry electricity tariff rates by around 9 percent. 

JAAF said the apparel industry is hopeful that the electricity regulator would consider higher industrial electricity tariff reductions as export performance of the apparel industry has taken a massive hit due to a sharp fall in orders given the adverse conditions of the global market. 

With export earnings from apparel and textile decreasing by 14.55 percent in May 2023, the industry can benefit from a further reduction in costs of operations with reduced industrial electricity tariff rates, JAAF pointed out.
This is also a key component in regaining the industry’s competitiveness in the region that took a hit amid repeated electricity tariff hikes since last year, it added.