The nationwide unplanned outage last Sunday has obviously got everyone upset. While some are trying to make political capital out of it, the responsible thing to do is to understand the causes and act to avoid a recurrence. This appeared to be the objective of the reporter who interviewed me last week for this article. There is one place where the report does not exactly reflect what I said. I was asked whether I was happy with CEB’s /PUCSL’s role.
I had been invited to moderate a panel discussion on consumer rights in electricity, in the context of a recently issued charter of consumer rights and obligations. This was set to be a ho-hum affair, until the country experienced its third nationwide blackout within the last six months. This resulted in the shutdown of the 900 MW coal-powered plant, which means that the system will be in distress for 4-5 days until they get it fired up again. Since 2002, Sri Lankans have got used to uninterrupted power which they pay a lot. There is a lot of anger.
From late April to today, we were engaged in a major push on getting the findings of how ICTs could help improve electricity customer relations out to regulators and other stakeholders in Bangladesh, India and Sri Lanka. This is not as simple as telecom which is a central subject in all countries. In India, we (and our partners) succeeded in attracting regulators from three important states (Bihar, Gujarat and Maharashtra) to the half-day dissemination event. In Bangladesh, the Chair of the Bangladesh Electricity Regulatory Commission chaired the event and was present throughout. Today, we had a three hour exchange of ideas with the Director General and senior staff of the Public Utilities Commission of Sri Lanka.
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.
Earlier this year (April 2013) we pushed for Demand Side Management (DSM) in Sri Lanka to managing the burgeoning electricity demand in the country. Hence we were quite happy when the Public Utilities Commission of Sri Lankan (PUCSL) recently released draft regulations for the institutional framework conducting DSM activities in the electricity sector. Today, at a consultative workshop on the draft regulations, we recommended the following: Coordinate the market research design that each of the 5 distribution licensees have to conduct prior to initiating DSM activities. Make use of behavioral economics and Randomized Control Trials (RCTs) for high impact since it is the most effective way to understand consumer behavior and “nudge” them to more energy-efficient and energy-conserving behavior. The impact could be even higher if Sri Lanka were to quickly scale up the use of smart meters.
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.
Today, the Public Utilities Commission of Sri Lanka, held the oral-presentation component of the 2013 tariff hearing. In their effort to accommodate 70 or so persons/organizations among the 200+ that had made written submissions, they limited speaking time to 5-10 mts depending on how many issues had been covered and did not ask any questions of those making presentations. This was a pity, since the whole point of face-to-face interaction is interactivity. That said, I still found the exercise educative. For example, the spokesperson for one organization asked why the PUCSL had allowed a component of costs for ROE, return on equity.