CEB and LECO to pay interest on security deposits

Wednesday, 1 February 2017 01:59 - - {{hitsCtrl.values.hits}}

An annual interest of 8.5% to be paid for retail consumers while 8.5% monthly interest rate to be paid for bulk consumers
Post-2009 regulations implemented only this year
Over Rs. 10 billion held as deposits by CEB

The Public Utilities Commission of Sri Lanka (PUCSL) yesterday issued fresh guidelines to the Ceylon Electricity Board (CEB) and the Lanka Electricity Company Ltd. (LECO) to pay interest on the security deposit of electricity consumers held by the companies.

The service providers are now required to pay 8.93% interest on the security deposit made by each customer when providing an electricity connection.

“The requirement was there from 2009 after the Electricity Act No. 20 was passed. The CEB was not geared at the time to implement the measures outlined. However, it took more time than anticipated to implement them. We have now announced the rates and issued clear guidelines to do so,” PUCSL Director General Damitha Kumarasinghe said.

Electricity consumers are entitled to receive a payment for the security deposits under Section 28 of the Electricity Act No. 20 of 2009, where it describes the Distribution Licensee (CEB or LECO) to pay interest on such a sum of money at the rate approved by the PUCSL for the period in which the security deposit remains in the hands of the licensee.

As at 2014, the CEB held Rs. 10 billion in deposits in their books, the PUCSL confirmed. The interest received on the security deposit of the retail consumers held by the CEB and LECO will be credited by the January electricity bill of the following year.

Interest payment for the bulk supply consumer (A Tariff Customer in any tariffs category whose maximum contract demand is more than 42 kilo-volt-ampere), will be calculated monthly and will be credited to the electricity bill on a monthly basis.

In a termination of an electricity connection, PUCSL asked CEB and LECO to pay the interest up to the date of termination, together with the security deposit within a month from the date of termination, after deducting all dues to the licensee with respect to the billing account.

PUCSL has approved an annual interest rate of 8.93% for the security deposits (a monthly interest rate of 0.715%) for 2017, effective from 1 January. The interest rate is based on the average weighted fixed deposit rates (AWFDR) published by the Central Bank of Sri Lanka. PUCSL will announce the interest rate applicable for the respective year in January each year.

Consumers can make complaints to the respective licensees (CEB or LECO) when they encounter any issues related to obtaining interest. If a customer is not satisfied with the solution given by the licensees, such disputes related to interest payment may be submitted to the PUCSL for mediation.

PUCSL has stressed that the non-payment of interest on the security deposit will be an offence under the provision of the Electricity Act.