Earlier this year, LIRNEasia provided formal inputs to the public hearing on the electricity tariffs held by the Public Utilities Commission of Sri Lanka (PUCSL). None of our recommendations were reflected in the outcome of that process, but we were happy to see subsequent actions by the PUCSL reflecting them. We were also pleased to see some of our ideas reflected in a speech by the Leader of the Opposition.
The recent report indicating that the Ceylon Electricity Board has not only eliminated losses, but has shown profits appears to indicate that our predictions were right:
d. 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.