PwC to assist PUCSL to strengthen regulatory reporting framework of electricity industry

PUCSL Director General Damitha Kumarasinghe and PwC Sri Lanka Director Consulting Nishan Mendis exchanging contracts for the engagement

The Public Utilities Commission of Sri Lanka (PUCSL) intends to introduce Regulatory Accounting to Sri Lanka to regulate the electricity industry more effectively.

Regulatory Accou-nting is an accounting mechanism that provides complete and dedicated financial information about regulated businesses for the use of the regulator, industry, consumers and other stakeholders. Regulatory Accounting provides more focused information for regulatory purposes than the information found in statutory financial accounts. Furthermore Regulatory Accounting enhances the uniformity in the financial principles, logic and methodology adopted to determine electricity tariffs.

PUCSL as the regulator of the electricity industry is entrusted to review and adjust electricity tariffs as well as monitor the performance of the industry. For this purpose, PUCSL requires a specific set of regulatory information that is not captured in the statutory financial reports.  

The adoption of Regulatory Accounting would enable the PUCSL to assess the efficiency of electricity generation, transmission and distribution segments of the utilities better and effectively monitor the technical and financial performance.

This mechanism will improve transparency in the regulatory process since the regulatory accounts would become the main source of audited regulatory information of the electricity industry.

A team of financial reporting and power sector regulatory experts from PwC Sri Lanka and PwC India would work with PUCSL, Ceylon Electricity Board (CEB) and Lanka Electricity Company (LECO) to formulate a set of guidelines for preparation of regulatory accounts. The PwC team would also train the relevant staff of these institutions on preparation and interpretation of regulatory accounts.