Organization of the Power Sector Main expectations from the Sri Lanka Electricity Act 2009 as related to tariff Corner stones in the Sri Lanka Electricity Act for Tariff Determination Prerequisites for Tariff Determination in the legislation Filing of Licensee Revenue Requirements Generation Revenue Requirements Transmission Revenue Requirements Distribution Revenue Requirements A summary of CEB Operational Costs

1. Implementation
of
Tariff
Methodology
Bandula S. Tilakasena
Ceylon Electricity Board

2. Government of Sri Lanka
Ministry of Power and Energy
Public Utilities Commission
of
Sri Lanka
CEB Generation
Licence GL
Consumers
CEB Disribution
Small Power Producers
Independent Power Producers
Lanka Electricity Company PVT Ltd.
DL5
CEB Disribution
CEB Disribution
Licence DL 2
CEB Disribution
CEB Transmission
Licence TL
Licence DL 1
Licence DL 4
Licence DL 3
Licensing
Licensing
GOSL Policy
Directions
Organization of
the Power Sector

3. Main expectations from the Sri Lanka
Electricity Act 2009 as related to tariff
• Cost-reflective Tariffs & Charges (s. 30)
• Licensees being able to finance the
licensed activities (s. 4)

4. Corner stones in the Sri Lanka Electricity Act
for Tariff Determination
• Cost Reflective Methodology
Permit relevant licensees to recover all
reasonable costs incurred in carrying out
the authorized activities
• To be in accordance with Government
Policy Guidelines under Section 5

5. Prerequisites for Tariff Determination in the
legislation
• PUCSL Act : Section 30 (2)(a)
Government compensates Licensees for compliance
with GOSL Policy Directions
• Section 30 (4) of SLEA and S 30(2)(b) of PUCSL
Act
Upon being satisfied of adequacy of funds being
provided by the Treasury to bear the cost of any subsidy
approved by the Government to subsidize Costumers…
• Cross subsidies are recoverable from Customer
categories

6. Filing of Licensee Revenue Requirements
All Licensees submitted their Revenue
Requirements in August 2010 for the First Tariff
Period.
An Extraordinary Tariff Filing was allowed for
August 2011

7. Generation Revenue Requirements
• The Transmission Licensee (TL) submitted its
Revenue Requirements on account of
generation costs in a prescribed format for each
power plant, on the basis of the forecast
dispatch schedule.
• The costs of generation are on the basis of
Agreed Values of the respective PPA’s

8. Transmission Revenue Requirements
• The Transmission Licensee (TL) submitted their
Revenue Requirements for the Transmission
Business and Bulk Supply and Operation
Business (BSOB) as well in August 2010.
• There was no prescribed format, but the TL
submitted this in great detail, up to the level of
respective cost codes of each cost center.

9. Distribution Revenue Requirements
• The Distribution Licensees (TL) also submitted
their Revenue Requirements for the Distribution
and Retail Supply Businesses in August 2010.
• There was no prescribed format, but the DL too
submitted this in detail, up to the level of
respective cost codes of each cost center.

10. Decision Document 2011
• The Tariff Decision for the First tariff Period was
announced in January 2011, after following the
statutory requirements
• The Licensees made the Extraordinary Filing as
on the due time
• No decision was announced for the
Extraordinary Filing

11. Actual Costs
• All Licensees submit their Actual Costs in
December and June each year
• In addition, Transmission Licensee (TL) submits
its forecast Revenue Requirements on account
of generation costs in a prescribed electronic
format for each power plant, on the basis of the
forecast dispatch schedule.

12. A summary of CEB Operational Costs
Enrich Life through Power
Generation Cost
80%
Personnel
6.1%
Materials
1.7%
Accommodation
0.4%
Transport &
Communication
1.0%
Other costs
1.2%
Finance cost
1.4%
Depreciation
11%

13. Adjustments to Revenue Requirements
• Adjustments are made to the base allowed
revenues for TL and DL on the basis of SLCPI and
US$
• Bi-annual (BST) compensation to DL and TL are
being made on the basis of actual costs.
• No annual end-user tariff adjustment took place
according to Clause 3.1.4 of the Tariff
Methodology

14. Uniform National Tariff
• UNT is calculated by PUCSL on the basis of
approved Revenue Requirements of the
Licensees
• Difference between the Approved Revenues and
Revenues generated through UNT are
compensated, albeit some concerns of the
Licensees

15. Government Policy Directions
Many Regulatory Decisions are taking cover under
GOSL Policy Directions.
However, other than the broad policy as approved
in 2009, none of these “Policy Directions” strictly
fulfilled the statutory requirements of Section 5 of
the SLEA

16. Bulk Supply Transaction Account
The Licensee has established the Bulk Supply
Transaction Account with approval of the PUCSL
to record the transactions
This depicts the transactions taking place between
the Licensee on actual basis, and submitted to
PUCSL bi-annually

17. Enrich Life through Power
Thank
You

18. Enhanced accessibility
all over Sri Lanka…
Electrification Level in
December 2012
Target :
Electrification by end 2013
Enrich Life through Power
93%
100%
60-80%
80-97%
<60%
>97%
Kurunegala
91 %
Moneragala
76%
Kilinochchi
16%
Vavuniya
75 %
Trincomalee
75%
Polonnaruwa
85 %
Kegalle
91%
Batticoloa
64%
Matale
97 %
Kandy
93 %
Nuwaraeliya
97 %
Ratnapura
86%
Galle
99 %
Hambantota
100%
Mullaithivu 18%
Anuradhapura
90 %
Badulla
90%
Puttalam
96 %
Mannar
59%
Ampara
87 %
Matara
98 %
Kalutara
99%
Colombo
100%
Gampaha
100%
Jaffna 80 %

19. CEB owns and operates
the entire transmission
network that operates at
220 kV and 132 kV
Transmission
2010 2011 2012
220 kV 483 km 483 km 501 km
132 kV 1,755 km 1,774 km 1,840 km
Grid
Substations
55 57 58

20. Reducing System Loss
Enrich Life through Power
0.0
5.0
10.0
15.0
20.0
25.0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Percentage(%)
December 2012:
System Losses on Net Generation base = 10.42%

21. Projected Loss
From 2011 and beyond 2013…
Enrich Life through Power
Year
Loss
Rs Billion
2011 19.27
2012 61.16
2013 43.78
2014 23.27
2015 3.5
2016 (1.4)
Main Assumptions for 2013-2016
• No tariff increase after 2013
• Debt Service commences in 2014
• Nominal price escalation of Oil = 5%
• Price escalation for coal = 5%
• No price escalation for NCRE
• Puttalam Coal Phase 2 (600 MW)
available in October 2013 - April 2014
• Hydro inflow at 63% dry