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.
LIRNEasia is not known as an energy shop, but we’ve been getting into electricity issues gradually. In a week or so, LIRNEasia will be making a presentation to the Public Utility Commission of Sri Lanka on the best ways to introduce demand-side management. This NYT article shows how difficult deviating from the conventional path is and how much care has to be taken in effecting reforms in this critical area. German families are being hit by rapidly increasing electricity rates, to the point where growing numbers of them can no longer afford to pay the bill. Businesses are more and more worried that their energy costs will put them at a disadvantage to competitors in nations with lower energy costs, and some energy-intensive industries have begun to shun the country because they fear steeper costs ahead.
Banded forbearance, a concept we have been working on since early 2007 which was further developed in our interactions with the Communications Authority of the Maldives, has just been published as a refereed journal article by the International Journal of Regulation and Governance. A previous version of this article was selected for presentation at the CPRsouth 3 conference in Beijing in December 2008. The abstract is given below: Fast growing telecom markets, especially in the developing world, are attracting new types of users, especially those at the Bottom of the Pyramid (BOP). Innovative pricing is needed to respond to this increasingly heterogeneous demand. However, many regulators still claim to regulate prices using methods from the monopoly era, despite lacking capacity to effectively regulate proliferating tariff plans.