Council of Ministers Energy Regulation No. 447-2019

PART FOUR ELECTRICITY TARIFF AND GRID ACCESS

SUB-SECTION ONE ELECTRICITY TARIFF

29.General Principles

In reviewing and recommending grid related tariff or approving off-grid tariff the Authority shall be guided by the following principles:

1/ the generation, transmission, distribution and sale of electricity are conducted on the basis of commercial principles and best practice of the sector;

2/ the factors which would encourage competition, efficiency, economical use of the resource, efficiency in performance, transparency, accommodating the needs of system integrity and attract investment to the electricity sector, as appropriate;

3/ safeguarding customers interest and at the same time recover cost of electricity as per the relevant Regulation;

4/ application of tariff principles for more than a year;

5/ the promotion of co-generation and generation of electricity from renewable energy sources;

6/ costs covered by subsidy, cross-subsidy or grant shall not be reflected in the costs of business operations; and

7/ tariff adjustments shall, to the extent possible, ensure price stability and simplicity of administration.

30.Tariff Review, Recommendation and Approval

1/ In reviewing and recommending grid related tariff or approving off-grid tariff in relation to generation, transmission, distribution and sale of electricity, the following and other appropriate factors may be considered:

  1. a) cost of fuel;
  2. b) cost of power purchase;
  3. c) the rate of inflation or deflation; and
  4. d) foreign currency fluctuation.

2/In reviewing and recommending grid related tariff or approving off-grid tariff the Authority may require a licensee to furnish separate details, as may be specified, in the tariff directive.

3/The Authority shall not, while reviewing and recommending grid related tariff or approving off-grid tariff, show undue preference to any customer of electricity; except on the bases of the following:

  1. a) customers load factor, power factor, voltage;

b)total consumption of electricity during any specified period; or

c)the geographical location, the nature of supply and the purpose for which the supply is required.

  1. Procedure for Tariff Review, Recommendation and Approval

1/ The licensee shall submit application to the

Authority for reviewing and recommending grid related tariff or approval of off-grid tariff under Article 29 of this Regulation.

2/ The Authority shall, within 120 (one hundred twenty) days from receipt of an application as provided under sub-Article

(1) of this Article and after considering all suggestions and objections received from the public, approve off-grid tariff with such modifications or reject the application for reasons to be recorded; provided, however, that an applicant shall be given an opportunity to be heard before rejecting his application.

3/ The Authority shall submit the recommended grid related tariff for approval to the relevant Government Organ.

4/ The Authority shall send copy of grid related tariff and off-grid tariff to the concerned licensee within seven (7) days of such approval.

5/ The licensee shall, in order to create public awareness, publicize to the public the approved tariff using mass media outlets having wide coverage and other communication media.

6/ The Authority may issue directive containing the following components about income capacity conditions to be followed by all licensees:

  1. a) regulatory asset base;
  2. b) depreciation;
  3. c) working capital;
  4. d) cost of capital;
  5. e) return on investment;
  6. f) operation and maintenance expenses, including customer connection costs; and
  7. g) other related costs.

/ The licensee shall conduct tariff review study every four years of interval in accordance with tariff procedure to be issued by the Authority and shall submit the study report to the Authority.

8/ The Authority shall determine by Directive for submission of tariff application by licensee other than the tariff application procedure provided under sub-article (7) of this Article.

32.Uniform System of Accounts and Audit Report

1/The Authority shall issue directive on uniform system of accounting based on generally accepted accounting principles to support the tariff regulation efforts and be applied by all licensees.

2/Any licensee shall submit audited reports of its accounts to the Authority within 6 (six) months from the end of the government’s fiscal year.

SUB-SECTION TWO GRID ACCESS

33.Principles

1/ Based on the conditions specified in the license, access to and use of the national transmission grid shall be open for international power trade; and its use shall be, transparent and cost-reflective, and based on transmission service agreement to be approved.

2/ Access to the national transmission grid as provided under sub-article (1) of this Article, shall not adversely affect services of the existing customers.

34.Refusal of Access

1/The licensee may refuse or prevent connection or access, until the condition are improved, when the national grid connection or access contradict with grid access principle provided under Article 33 of this Regulation.

2/The Authority shall examine and pass decision on the reliability of the measure taken by the licensee pursuant to sub-article

(1) of this Article.

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