Access to Dispute Resolution System

Licensing

Licensing – Electricity Industry

The primary method of regulation of the electricity industry in Sri Lanka is through a licensing regime. This section sets out the type of activities in the electricity industry that require licenses, what those licenses will contain and what can be done with licenses after they have been issued.

Licensing under the Sri Lanka Electricity Act, No. 20 of 2009 (SLEA)

Specifically, under the SLEA, it is an offence to generate, transmit, distribute or supply electricity unless you are authorised to do so by a licence, or are exempt from the requirement to obtain a licence. Exemptions can apply to an individual or a class of persons.

Since licenses are often the main instrument used to control the activities of those who generate, transmit, distribute or supply electricity, this means that detailed rules, processes and procedures need to be published, through a set of regulations. As such, the Licensing Application Regulations, which can be found on our website, should always be referred to before you make an application for either a licence or an exemption. In view of the fact that it is an offence to carry out a licensable activity without a licence or exemption, if you are intending to carry out a licensable activity, it is very important that you refer to both the SLEA and the Licensing Application Regulations.

Licence Conditions

The Licensing Application Regulations also include licence templates, (which will set out the different sets of conditions that will be in used in the relevant licences (that is, for generation, transmission, distribution and supply). These template licences are available on our website. Under the SLEA, licences will contain both general and special licence conditions.

General conditions

These are conditions that all licences may contain. A generation, transmission or distribution licence may include conditions, for example, that require the licensee to pay us for granting the licence; prevent the licensee from engaging in anti-competitive behaviour; and compel the licensee to adhere to our decisions, orders, direction and determinations.

Special conditions

These are conditions that are specific to particular types of licences. Some examples of special conditions that are contained in different licences are as follows:

  • generation licences include a condition requiring the generator to sell the electricity it generates only to a person holding a transmission licence;
  • transmission licence include a condition requiring the holder to forecast future electricity demand, to plan for the development of the transmission system and to procure the development of new generation plant to meet reasonable forecast demand; and
  • distribution licences include a condition requiring the licensee to publish codes of practice in relation to consumer issues, containing provisions that we consider necessary for the protection of consumers. As indicated above, you should refer to the SLEA for a wider list of the general and special conditions that licences can be expected to contain. You should be aware that when deciding whether to grant licences, we may also consider whether to include additional conditions, depending on the circumstances.

Application, grant and extension

If you intend to undertake an activity for which a licence is required, or wish to apply for an individual exemption, or if you want an extension of your current licence, you should submit an application to us.

The licensing application regulations deal with both of these matters in greater detail, and therefore you should always refer to them before you make an application.

Modification

If you hold a licence, then during the period of validity of that licence, you may wish to apply for it to be modified. Alternatively, we may also modify it for various reasons.

We may modify licences where the licensee agrees with the proposed modification. Where the licensee disagrees then the SLEA provides for the Minister in charge of the subject of power and energy to decide whether and what modifications should be made in the public interest. This decision is made following a reference by us to this Minister, including our views on how the public interest is best served.

Exemptions for Distribution Licensees

Small distributors (Condominium housing schemes, Residential buildings, Shopping complexes, etc.) who buy electricity from the Distribution Licensees and distribute them to tenants, were not having a rationalized method to decide on the tariff. Therefore billing methods of small distributors had been creating disputes among consumers and the distributors before the enactment of Sri Lanka Electricity Act No 20 of 2009.

With the enactment of the Sri Lanka Electricity Act, No. 20 of 2009, the legal background to suit this problem was introduced. In terms of Section 7 of the Act, Parties who are currently engaged in the distribution or supply of electricity are required to obtain a license or an exemption to continue such activities.

How to Apply for an Exemption?

Small distributors can simply download the application from the PUCSL web site. The applicant should submit the accurately prepared application with all the necessary documents, information and also a fee of 1000 LKR to the Commission.

Thereafter, the Commission grants the exemption for the applicant, followed by a Gazette Notification, Public notice on newspapers and notices to other relevant parties including the Minister of Power and Energy.

After the exemption is granted, the distributor should come up with a proposal for the tariff rate, seeking the approval of the Commission. The General guidelines that the distributor should follow to decide the tariff rate, are available at the PUCSL web site. The distributor should also submit all related and necessary documents to support his proposal.

Licensee Information Submission System

In order to regulate the electricity industry, the Commission requires standard information from Licensees regarding their operations on a regular basis. Therefore, a system was developed and data is currently gathered through web based system on standard formats. The Data is verified and various Periodical Reports are produced for regulatory purposes.

LISS: License Information Submission System