Methodology
The ultimate objective of the tariffs methodology is to identify the appropriate cost that to be charge from the consumer as tariffs.
The ultimate objective of the tariffs methodology is to identify the appropriate cost that to be charge from the consumer as tariffs.
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 scrutinize 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 tools that have been built into the tariff determination is that the “Public Consultation”. The tariffs filling prepared in line with the tariff methodology is available for the public consultation where any stakeholder can comment 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 regulator is governed by public consultation.