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Friday, October 7, 2022

JAAF requests PUCSL to re-assess off-peak tariff rates – The Morning

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  • Says 113% increase is ‘extraordinarily’ high

The Joint Apparel Association (JAAF) submitted counter proposals at the stakeholder consultation, identifying the 113% increase in off-peak industrial electricity tariffs to be extraordinarily high and detrimental to the industry.

With the Public Utilities Commission (PUCSL) granting permission to the Ceylon Electricity Board (CBSL) to increase 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.

The JAAF suggested implementing the final tariff increases in two phases, with the proposed rate being reduced to approximately 50% 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 Ceylon Electricity Board (CEB).

Alarmingly, despite the cautions highlighted by JAAF, the approved off-peak and daytime tariffs are higher than those initially proposed for the l2 category. Moreover, much to the industry’s surprise, revisions made to daytime tariffs are three times higher than the rate initially proposed.

Industry I2 Previous Proposed Published
Daytime (05:30-18:30) 11.00 18.50 29.00
Peak (18:30-22:30) 20.50 31.50 34.50
Off-peak (22:30-05:30) 6.85 14.50 15.00

 

The JAAF expressed concern over the finalised industrial electricity tariff rates, as it has overlooked the needs of the apparel industry and suggestions made by the JAAF at the stakeholder consultation on behalf of the industry.

To reiterate JAAF’s concerns, the increase in off-peak tariffs defeats the very purpose of having an off-peak slab, which is to incentivise 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.

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 $ 8 billion by 2025. This will prove to be harmful to Sri Lanka’s already fragile economy, hampering value addition and export diversification.

Therefore, the JAAF urges PUCSL, the electricity sector regulator, to reassess the exponentially high off-peak and daytime industry tariff rates, and to consider submissions made against the initial proposals. Urgent attention to this matter is vital to enable companies to plan and budget better, as this will enable the apparel industry to continue supporting the revival of the country’s economy.

 

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