By The Pulseline News Desk
Sri Lanka’s National System Operator (NSO) has decided not to seek an electricity tariff increase for the October–December 2026 quarter, citing favourable hydrological conditions and forecasts of above-normal rainfall.
The announcement was made today (5) during a stakeholder consultation on the proposed electricity tariff revision for the final quarter of the year.
The NSO has said the decision was based on current reservoir storage levels and expectations of above-normal rainfall under prevailing El Niño conditions, which are expected to strengthen hydropower generation over the next three months.
The anticipated increase in hydropower availability, combined with existing water reserves, is expected to reduce electricity generation costs and eliminate the need for a tariff increase during the quarter.
The decision marks a departure from the NSO’s initial proposal, which sought a 2.88% increase in electricity sales revenue, citing a projected revenue deficit of Rs. 4.4 billion for the fourth quarter.
Following a preliminary assessment of the proposal, the Public Utilities Commission of Sri Lanka (PUCSL) had recommended a reduced tariff increase of 1.46%.
According to PUCSL, the projected cost of electricity supply for the quarter stood at Rs. 157.3 billion, against anticipated revenue of Rs. 154 billion from electricity sales. A further revenue deficit of Rs. 1.1 billion carried forward from the previous period was also factored into the assessment.
The regulatory body’s preliminary review included adjustments to generation capacity costs submitted by Electricity Generation Lanka (EGL), as well as revisions to estimated additional expenses arising from the use of substandard coal during the second quarter of 2026.
Other factors considered included electricity demand forecasts, fuel prices, hydropower availability, renewable energy contributions, battery energy storage system (BESS) costs and additional expenses submitted by Electricity Distribution Lanka (EDL).
The NSO had initially projected electricity demand of 4,796 gigawatt-hours for the October–December period, with major hydropower expected to contribute 32.34% of total generation.
Coal was projected to account for 25.68%, while other renewable energy sources were expected to contribute 28.81%.
With the NSO now ruling out a tariff increase, attention will turn to PUCSL’s final determination following the stakeholder consultation and completion of its regulatory review.
The commission is responsible for making the final decision on electricity tariffs for the fourth quarter of 2026.
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