Sri Lanka Leader of Opposition echoes LIRNEasia’s disregarded recommendation to PUCSL

Posted on July 22, 2013  /  0 Comments

The Lankadeepa of 22 July 2013 carried report about the Leader of the Opposition arguing that electricity tariffs be adjusted to account for the larger contribution from low-cost hydroelectric generators to the overall supply mix of the Ceylon Electricity Board. This reflects a recommendation made by LIRNEasia in its submission made at the Public Hearing on the electricity tariff:

The cost models that underlie the tariff proposal are based on assumptions of levels of use that may change because of the radical redesign of the tariff structure. If demand is lower than projected, especially at the peak, it is possible that the proposed tariff will yield excessive earnings. Therefore, the approved tariff should include provisions for monitoring revenue levels and for periodic adjustments and/or the return of excess earnings to consumers.

These kinds of adjustment mechanisms are not difficult to embed within tariff decisions. If the PUCSL followed our advice, they would today be in a very good position and people would begin to understand what good regulation can do.

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