PUCSL to revise power tariffs biannually from April 2017

By Charumini de Silva

Stepping up its duties, the Public Utilities Commission of Sri Lanka (PUCSL) aims to revise electricity tariffs twice a year from April next year to ensure a transparent and reasonable tariff structure that would benefit both the public as well as the Government.

According to the PUCSL, the Government has already decided with the commission that there will be two price revisions per annum on 1 April and 1 October.

Thereby, the Ceylon Electricity Board (CEB) and the Lanka Electricity Company Ltd. (LECO) needs to prepare and submit their accounts according to the newly-introduced accountancy guidelines by the Commission by 2017, which would assures transparency and cost efficiency to all stakeholders.

“The regulatory accounts are all about transparency and fairness. With the implementation of these newly-introduced regulatory accounting guidelines, what we are trying to do is to make the tariff fair to the customers, fair to the utilities, and fair to the Government,” said PUCSL Director General Damitha Kumarasinghe at the inaugural training program of regulatory accounts for the staff of CEB and LECO on Tuesday.

According to Section 30 of Sri Lanka Electricity Act, the utilities have the right to recover the cost but cannot sell power at extraordinary prices to consumers for an extended period of time.  

Kumarasinghe said with these new guidelines coming into place the regulatory accounting will improve the transparency as well as the acceptability of the pricing structure to the public and for the CEB.

He also pointed out that the newly-introduced guidelines would assist PUCSL to gain more information to help in decision-making procedures.

According to the tariff methodology designed by the Commission, the determination of allowed revenue requires information at the generation unit level, in the case of generation and sub functional level, in the case of transmission and distribution.

Therefore, it is required to prepare separate accounts for each of the licensed businesses which will allow the PUCSL to obtain financial and non-financial information of the licensees.

However, the existing accounting system of the CEB is structured under nine divisions which have no accounting segregation for regulated and non-regulated business activities such as air conditioning, refrigeration and lift installation businesses. Hence, a regulatory accounting system is required to bridge the gap between accounting information currently available and information that is required by the Commission for making decisions.

The PUCSL said the first set of annual regulatory accounts would commence from 1 January next year.

Stating the move was a long overdue, CEB Chairman Anura Wijepala admitted that PUCSL was in the right and called for fullest corporation to implement it to reflect the correct prices and provide the right picture to the general public, adding that it would build confidence of CEB activities.

Wijepala said with the coal power plant, which caters to around 50% of the country’s daily energy requirement, they had been able to reduce the cost significantly to bearable levels to the public and insisted that it was high time to agree with new Government policies to try this regulatory mechanism in real terms by reflecting costs.

“There are two responsibilities on us, those are to prepare the accounts reflecting the real cost and keep the cost down, so that the people can bear them. Monopolies like us cannot survive in this world unless we are very well regulated with checks and balances exist,” Wijepala admitted.