Electricity Tariffs and Charges

When a consumer consumes a good or service it is a well-known fact that the price of such a good or service needs to be paid by the consumer. The same principle applies for electricity consumption. Therefore, all electricity related tariffs and charges are to be paid by the consumer.

When consumers make direct purchases of goods or services, the prices of these goods or services is generally made available or predetermined to the consumer beforehand. In case of a network industry the situation is slightly different. Electricity being a network industry, at the last point of the network, where the end consumer connects to the network is where the payment arises. However, to bring electricity to the doorstep of the consumer a set of extensive related activities needs to take place, which comprises of a sequence of nodes inter-connected into a network. Hence all the costs that incurred within the electricity network, need to be accounted for in determining the final price to be paid by the consumer. Following are the major component of the activities in the Network:

  • Electricity Generation:
  • Electricity Transmission:
  • Electricity Distribution:

The cost of all industry activities is taken into account in determining electricity tariffs.

When the lectricity service provider themselves decide on the tariffs, there is a possibility that they may charge over and above the acutal incurred costs. On the other hand, if consumers are to decide on electricity tariffs, the tendency is to determine a proce lower than the actual costs incurred in the electricity, generation, transmission and distribution process. Therefore, tariff setting is a process which needs to be conducted in an independent manner. This is where regulation comes in to exsistence. It is the responsibility of the regulator to fix the electricity tariffs taking into account the interests of the consumer as well as the interest of the service provider.

The Section 30 of Sri Lanka Electricity Act No 20 of 2009 .

  • Permit the relevant licensee to recover all reasonable cost incurred in the carrying out of the activities authorized by its license on an efficient basis.
  • Be approved by the Commission in accordance with the policy guideline approved by the Cabinet of Ministers

Though the tariff sets by the license since they are more information rich than the regulator, it has to be done in line with the Tariffs methodology approved by the regulator.

How does the regulation give incentive for better management?

The regulation does not always mean controlling of someone else behavior. Regulation is all about giving incentives to behave for the betterment of society. In case of tariffs setting, regulator is going to decide the amount of money required by the licensee to provide the good and services for customers. However, the business is managed by license and regulator is going to decide the prices. This is the puzzle that intend solve by the tariffs methodology. A similar analogy is given here to understand the tariffs determination.

Imagine a situation a school going child come and request some money from father. How could farther handle this situation. Sometimes father tend to figure out exacts needs of the child and calculate the exact amount of money that is required for child to maintain his/her living for a day. Other method is, farther can have a reasonable estimate on possible expenditures of a day and give that amount to the child. Let’s assume the farther decided to give Rs. 100 and then the child should decide the way in which the amount spend and maintain his/her living. Then next day when child request money farther would ask what you did for the money gave yesterday. Then child say I spend this much of money for food, transport etc, and I do have a balance of this much. Then farther would get the balance into his hand and again give Rs.100 to child for the second day. The proposed tariff setting which recommended in the tariffs methodology is almost equal to the operations between the child and farther, illustrated above.

The role played by the farther is equal to the role played by the regulator. In the above example Rs. 100 which is the cap of child revenue per day is arbitrary decide by the farther, in case of regulator such arbitrary decisions are not permitted however required revenue for the license need to be estimated in a methodical manner. In the tariffs methodology the allowed revenue estimation methods for transmission license and distribution licenses are recommended. Hence in tariffs approval process most critical event is to identify the prudent cost including a fair return on investment which could be charge from the Consumer. Tariffs rate design is in line with the Government Policy Objectives and based on the policy guidelines tariffs categories are being designed.

The ultimate objective of the tariffs methodology is to identify the appropriate cost that to be charge from the consumer as tariffs. Since there are three major components in the electricity industry aggregate cost of all three components is the cost that consumer has to be paid through tariffs. The next question arises in case of cost estimation is “what Cost” and “How much” cost are to be amalgamated into the Tariffs. The two questions identified above the “What Cost” and “How Much” is basically submitted by the license as a tariffs filing which identified in terms of provisions in the tariffs methodology. Such submissions scrutinizes by the regulator in view of identifying the prudent cost. How does the regulator decide which cost is prudent which is not? One of the most powerful tool that has been built into the tariff determination is that the “Public Consultation”. The tariffs filling prepared in line with the tariff methodology is available for public consultation where any stakeholder can comments on the tariffs filling submitted by the licensee. This is a unique opportunity available for general public to comment on proposed tariffs which is being paid by them. The discretionary power vest with regulator is governed through public consultation.

The Multi Year Tariff System (MYTS) is a 5 year period starting from 2011 to 2015. A MYTS implies that within this period,

  • the distribution allowed revenue is adjusted to reflect the prevailing inflation
  • the distribution allowed revenue is adjusted by increase in the number of customers / energy sold, etc.
  • decreases in the actual distribution cost are appropriated by the Licensee.
  • retail tariffs are frequently adjusted, for instance quarterly, allowing to pass through to the tariffs the actual changes in generations costs, normally following the pass-through provisions stated in the regulation.

Archives

The first ever tariffs approval based on an approved tariffs methodology was effective from 1st January 2011. The tariffs filing which is the submission of estimated revenue requirements by licensee took place on 9th September 2010. Public Hearing was held on 15th December 2010, minutes are available. Upon the completion of tariff approval process decision on electricity tariffs -2011 was issued by the Commission and requested licenses to implement the decision.

Current Tariffs for all categories

Customer Category D-1

This rate applies to supply of electricity used for domestic purposes in private residences.

Consumption blocks are based on a 30 day billing period and the number of units in a block would be prorarted according to the number of dates in each billing period.

Domestic Low Users (if monthly consumption is 60 unites per month or less than 60 units)

Consumption per month(kWh)

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

0-30 2.50 30.00
31-60 4.85 60.00

Domestic-Users over 60 units per month

Consumption per month(kWh)

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

0-60 7.85
61-90 10.00 90.00
91-120 27.75 480.00
121-180 32.00 480.00
More Than 180 45.00 540.00

Optional Time of Use (ToU) Tariff to for Domestic Customers

Time of Use (ToU) Energy Charge (LKR/kWh) Fixed Charge (LKR/ Month)
Off Peak (22:30 – 05:30 hrs) 13.00 540.00
Day (05:30 – 18:30 hrs) 25.00
Peak (18:30 – 22:30 hrs) 54.00

TARIFF DECISION (Non-Domestic Categories) effective from 15th November 2014

Customer Type: Religious and Charitable

Customer Category R-1

The tariff will be charged on Incremental Block Tariff basis

This rate shall apply to supplies of electricity to,

  1. places of public religious worship including private residences of priests where such residences are associated with or are within the place of public religious worship,
  2. Homes for aged, orphanages and homes for the handicapped, which are specifically certified by the Director of Social Services as charitable institutions, and the installation should not include any building used for commercial purposes.

Consumption per month(kWh)

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

0-30 1.90 30
31-90 2.80 60
91-120 6.75 180
121-180 7.50 180
>180 9.40 240

Customer Type: Industrial

Supply of electricity to be used for ‘Agriculture’, ‘Forestry and Fishing’, ‘Mining and Quarrying’, ‘Manufacturing’, ‘Electricity, Gas, Steam and Air Conditioning Supply’, ‘Water Supply; Sewerage, Waste Management and Remediation Activities’ as classified under the relevant sections of the detailed classification published in the website of  Public Utilities Commission of Sri Lanka, for electricity tariff purposes.

Customer Category I-1

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand is less than or equal to 42 kVA.

Consumption per month(kWh)

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

less than or equal 300 10.80
more than 300 12.20 600

 

This is an optional tariff relevant to industrial consumers under following sub categories 011,012,013 having a contract demand of less than 42kVA and connected to 400/230V.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 20.50
Day (5.30 – 18.30) 11.00
Off-peak(22.30 – 05.30) 6.85 300

 

 

Customer Category I-2

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand exceeds 42 kVA.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 20.50
Day (5.30 – 18.30) 11.00
Off-peak(22.30 – 05.30) 6.85 3,000 1,100

Customer Category I-3

This rate shall apply to supplies at each individual point of supply delivered and metered at 11,000 Volt nominal and above.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 23.50
Day (5.30 – 18.30) 10.25
Off-peak(22.30 – 05.30) 5.90 3,000 1,000

Customer Type: Hotel

Supply of electricity used for hotels approved by the Sri Lanka Tourism Development Authority.

Customer Category H-1

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand is less than or equal to 42 kVA.

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

21.50 600

Customer Category H-2

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand exceeds 42kVA.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 23.50
Day (5.30 – 18.30) 14.65
Off-peak(22.30 – 05.30) 9.80 3,000 1,100

Customer Category H-3

This rate shall apply to supplies at each individual point of supply delivered and metered at 11,000 Volt nominal and above.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 22.50
Day (5.30 – 18.30) 13.70
Off-peak(22.30 – 05.30) 8.80 3,000 1,100

 

Customer Type: General

Supply of electricity to be used in shops, offices, banks, warehouses, public buildings, hospitals, educational establishments, places of entertainment and other premises not covered under any other tariffs.

Customer Category G-1

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand is less than or equal to 42 kVA.

Consumption per month(kWh)

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

les than or equal 300 18.30
more than 300 22.85 240

Customer Category G-2

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand exceeds 42 kVA.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 26.60
Day (5.30 – 18.30) 21.80
Off-peak(22.30 – 05.30) 15.40 3,000 1,100

Customer Category G-3

This rate shall apply to supplies at each individual point of supply delivered and metered at 11,000 Volt nominal and above.

Time Interval

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

Peak (18.30 – 22.30) 25.50
Day (5.30 – 18.30) 20.70
Off-peak(22.30 – 05.30) 14.35 3,000 1,000

Government Category

Supply of electricity to be used in schools, hospitals, vocational training institutions, and universities, which are fully owned by the Government and funded through the national budget and provide their services free of charge to the general public. These customers shall be of categories GP-1, GP-2 or GP-3. Existing and new customers of the type described above may make an application in writing to the relevant distribution licensee to obtain the government Category.

Customer Category GV-1

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand is less than or equal to 42 kVA.

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

14.65 600

Customer Category GV-2

This rate shall apply to supplies at each individual point of supply delivered and metered at 400/230 Volt nominal and where the contract demand exceeds 42 kVA.

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

14.55 3,000 1,100

Customer Category GV-3

This rate shall apply to supplies at each individual point of supply delivered and metered at 11,000 Volt nominal and above.

Energy Charge (LKR/kWh)

Fixed Charge(LKR/month)

Maximum Demand Charge Per month(LKR/kVA

14.35 3,000 1,000

Commission approved Electricity Tariff for the customers who are charging their vehicles at CEB owned charging stations.

Tariff Category TOU Time Period Charge (LKR/kWh)
DC Fast Charging Day (0530-1830 hrs) 50.00
Peak (1830-2230 hrs) 70.00
Off peak (2230-0530 hrs) 30.00
Level 2 AC Charging Day (0530-1830 hrs) 30.00
Peak (1830-2230 hrs) 55.00
Off peak (2230-0530 hrs) 20.00

Street Lighting

There shall be two types of street lighting customers, public and private:

(a)Street lighting for public use, where the street lights are fixed along public roads, and where the road belongs to or is maintained by a Local Authority or a Provincial Authority or the Road Development Authority, and where the road users do not pay a fee for the use of such roadways and have unhindered access

(b)Street lighting for private use along roadways belonging to any individual or institution other than the Authorities listed in (a) above. Roadways in which ownership is not specifically defined and any other premises other than a roadway belonging to the authorities listed in (a) including areas designated for recreation (such as parks including roads leading to such parks) or other services (such as offices and depots, and roads leading to such offices and depots), shall be considered as private.

Street lighting for public use shall continue to be metered, invoiced at the rate of Rs. 17.00 kWh (rate applicable for both public and private use of street lighting), and approved by the relevant Local, Provincial or Road authority.

Archives

Electricity tariff is not the only charge that is to be charged from the consumers. There are other instances where the consumer is in need of services from the Transmission Licensee and Distribution Licensees. Basically, these services include

  • New electricity supply connection.
  • Services in relation to an electricity supply already provided. (Energy meter testing, Installation testing, Pole shifting, etc)
  • Any other services which the Licensees are required to provide at the request of a customer.

To supply these kinds of services the licensee has to bear a certain cost and therefore the consumer should be charged in a fair manner. These charges are known as Allowed Charges and to determine them, an approved Methodology has been implemented.

Objective of having an approved set of allowed charges is to reduce disputes between the consumer and the Licensee. The Commission, as an independent third party, approves the Allowed charges to ensure that the consumers are charged in an impartial manner, inducing more transparency.

Methodology for Allowed Charges

Methodology for Allowed Charges was approved by the Public Utilities Commission of Sri Lanka in terms of Section 30 of the Sri Lanka Electricity Act, No. 20 of 2009. The Methodology directs the Licensee to determine these charges without keeping any profit margin. Therefore, customers are benefited since they pay only for the services and instrument involved in the relevant service. Basic considerations of determining Allowed charges are as follows.

  • A common charge is applied for the services where the material requirement and the workload do not differ from service to service.
  • The charge for services where the material requirement and the workload differ from service to service, is determined on a case by case basis.

Approval of Allowed Charges

According to the methodology, Licensees submit their proposals for Allowed Charges to the Commission. The Commission examine those proposals and see whether they are comply with the methodology, before granting the approval. Once a proposal has been approved it will be valid for a period of one year. The same procedure is periodically repeated on an annual basis.


Archives

Also as per the Section 30 of Sri Lanka Electricity Act. No 20 of 2009, the Licensees are required to publish the approved charges in order to ensure public knowledge. Therefore Licensees should

  • Publish approved charges in national newspapers (Sinhala/Tamil/English) and their official website.
  • Keep a copy of approved charges for public access at all branch offices