The National System Operator said on Thursday that no electricity tariff increase is needed for the fourth quarter of 2026 — hours after the regulator published a proposal for a 1.46% rise, and having itself sought 2.88%. The sequence of Thursday’s filings is set out below, oldest first; the reversal is covered in the update.
The public consultation on the proposed increase was held on Thursday, with the regulator having already signalled that it would allow only about half of what the industry asked for.
The National System Operator has requested a 2.88% tariff revision for the quarter, the Public Utilities Commission of Sri Lanka said on Wednesday. Having considered prevailing conditions, the Commission’s position is that only a 1.46% revision can be granted, Hiru News reported on Thursday morning.
The final decision is due to be announced after today’s consultation concludes.
What is actually being decided
The tariff review covers the October–December period — the year’s fourth quarter — and was referred to the Commission by the National System Operator under the quarterly review process.
Two numbers are therefore in play, and they are different kinds of number. The 2.88% is an applicant’s request. The 1.46% is the regulator’s own assessment of what the position allows, stated publicly before the consultation rather than after it.
Neither is yet an approved tariff. The Commission has published a figure it considers supportable and must still hear representations before it determines anything.
What the filing does not report
This section records what was missing from the first filing of the morning. Three of the gaps below — the timing of the determination, the explanation of the gap between the two percentages, and the operator’s response to the lower figure — were answered later the same day and are covered in the updates.
The report does not state where the consultation is being held or who may take part, and gives no closing time for proceedings or date for the determination.
It does not say what a 1.46% revision would mean for an ordinary household bill, and gives no rupee figure at any consumption band. Nor does it explain the gap between the two percentages — what cost components the Commission accepted or rejected in cutting 2.88% to 1.46%. Fuel costs, generation mix, capacity payments and exchange rate assumptions are the usual drivers of a quarterly review; none is mentioned.
It also does not record any response from the National System Operator to the lower figure, from the Ceylon Electricity Board’s successor distribution entities, or from consumer organisations.
Context
Quarterly electricity tariff reviews are a standing feature of Sri Lanka’s post-restructuring electricity market, and the Commission has previously departed from the revision sought by the industry in both directions. A regulator publicly naming a lower figure ahead of a consultation narrows the range under discussion but does not close it, and the Commission remains obliged to consider representations before issuing a determination.
Update, 5 November: the operator drops its own request
The applicant has changed its position. An electricity tariff increase is not needed for the October-to-December period, the National System Operator said, in remarks carried by Hiru News at 9.54 a.m. on Thursday — roughly three hours after the regulator’s 1.46% proposal was published, and on the same day as the consultation.
The company said it reached that position taking reservoir water levels and rainfall into account.
That is the same ground the regulator had itself identified as the weakest part of its own calculation. In its consultation document, the Commission said its preliminary assessment remained subject to further examination “particularly regarding the adequacy of projected major hydro generation against rainfall forecasts”, along with the fuel prices used in the cost estimates and the cost-effective use of battery energy storage systems, the Daily FT reported.
The NSO had forecast major hydro generation of 1,551 GWh for the quarter — 32.34% of expected total generation, with other renewables adding a further 28.81%. Weeks of heavy rain have since filled reservoirs across the country. Note what the filing does and does not say: it reports the operator’s stated view, not a withdrawal of the submission, and the determination rests with the Commission regardless.
What the 2.88% was, and where it went
The earlier report left the gap between the two percentages unexplained. The consultation document accounts for it.
The NSO’s latest bulk supply cost forecast, submitted on 7 October, came to Rs 125.94 billion, down from Rs 134.16 billion in its initial 4 September submission. Forecast generation energy costs fell from Rs 105.58 billion to Rs 98.31 billion, and generation capacity costs from Rs 19.94 billion to Rs 18.98 billion.
On the licensees’ submissions the regulator initially put the quarter’s revenue shortfall at Rs 4.44 billion, which translated into the 2.88% increase. Its preliminary assessment then cut that shortfall to Rs 2.25 billion — and the increase to 1.46% — through three adjustments:
- Rs 669 million struck from Electricity Generation Lanka’s generation capacity cost, which the Commission found arose outside the Power Purchase Agreement framework.
- Rs 1.07 billion excluded from Electricity Distribution Lanka’s submission, relating to loan repayments for the Supporting Electricity Supply Reliability Improvement Project. The Commission said the cost was not allowable in principle because it is capital work in progress, recoverable through tariffs only once the assets are completed and capitalised.
- The cost of substandard coal burned in the second quarter of 2026, which the NSO put at Rs 2.86 billion and the Commission assessed higher, at Rs 4.38 billion.
After the adjustments the Commission’s preliminary calculation puts total fourth-quarter supply costs at Rs 156.66 billion against estimated revenue of Rs 154.03 billion at existing tariffs.
When the decision comes
A decision will be announced within the next six days, PUCSL Director of Communications Jayanath Herath said, according to NewsFirst. That supplies the timing the earlier filing left open. NewsFirst gives the two percentages in rounded form, as 2.8% and 1.4%.
A note on sourcing: Ada Derana also reported the proposed 1.46% revision and the consultation. Its pages have been returning an access block to this desk for some weeks, so its filings could not be fetched or date-verified and are not cited here. The Daily Mirror had not filed on the consultation at the time of writing.
