Electricity Utilities – Ceylon Electricity Board (CEB) & Lanka Electricity Company (LECO) In 1895, the first commercial distribution system was introduced within Colombo.
The sector was transferred to a separate department in 1926 and was later renamed as the Department of Government Electricity Undertaking (DGEU).
PUCSL can issue directions to licensees to provide subsidies to one or more consumer sectors, only if the Go SL compensates the licensee adequately.
With the social and economic developments and increasing electricity demand of the country and limited main hydro power sources, CEB had to diversify in to alternative energy sources such as fossil fuel (thermal). Transmission and distribution licensees can work out a tariff in accordance of a cost reflective methodology which will be allowed to publish only with the approval of the PUCSL.
In the costing process, the complete generation transmission and distribution costs are accumulate to calculate the total cost of production.
The cost of capital and depreciation are also considered into this.
Once the price of energy, capacity and reliability are set, the challenging part of the process, the incorporation of the energy policy vectors into the price has to be done. Therefore it can be stated that a tariff structure is derived from two major classes of requirements.
In one hand the requirements of a welfare government to achieve the general policies of welfare has to be considered.