World Consumer Rights Day:
Fair deal for electricity consumers
Damitha Kumarasinghe
Over the past few decades many countries have transformed their
electricity industries to achieve economic efficiency and social
objectives. One of the main such changes is the establishment of
regulatory institutions to regulate the industry.
Sri Lanka too has moved in that direction and today observes World
Consumer Rights Day, recognizing the importance of promoting the basic
rights of all consumers, demanding that those rights are respected and
protected, and ensuring the market is free of abuse and social
injustices which undermine these rights.
People should be educated on their rights and obligations as
electricity consumers. File photo |
World Consumer Rights Day was first observed on March 15, 1983 and
has since become an important occasion for mobilising citizen action.
Keeping in line with international best practices, the Government
enacted the Sri Lanka Electricity Act No 20 of 2009. The purpose of this
Act is to provide for the regulation of generation, transmission,
distribution, supply and use of electricity in the country. This Act
empowered the Public Utilities Commission of Sri Lanka (PUCSL) with
regulatory responsibilities in the electricity sector.
This new electricity regulatory regime is intended to provide
benefits to all stakeholders of the sector which include but not limited
to the Ceylon Electricity Board (CEB), Lanka Electricity Company (LECO),
other private generators, village electricity schemes, the government
and most importantly all consumers and prospective consumers.
This article, commemorating World Consumer Rights Day, examines the
benefits of the new electricity regulatory regime for two of the most
important stakeholder groups; the existing consumers of electricity and
the prospective consumers of electricity.
The Public Utilities Commission of Sri Lanka (PUCSL)
The PUCSL is a Government institution established by an Act of
Parliament, consisting of five commissioners with at least one member
each having qualifications and experience in the professions of
engineering, law and business management. It employs a small staff
comprising of mainly well-trained professionals in the disciplines of
engineering, economics, finance, law and business management.
Some of main objectives of the PUCSL (as per the PUCSL Act) related
to the electricity industry include:
1. Protecting the interests of consumers
2. Promoting efficiency in both the operations and capital
investments
3. Promoting efficient allocation of resources
4. Promoting safety and service quality
5. Benchmarking against internationals standards
6. Ensuring that price controlled entities acting efficiently do not
find it unduly difficult in financing their activities
Therefore, it is mandatory for PUCSL to safeguard the interests of
all stakeholders, not only the price controlled utilities such as CEB
and LECO, but also the marginalised electricity consumers.
Electricity consumer expectations
Electricity consumers have many expectations which mainly focus on
fair pricing of electricity. Among other issues are supply quality and
reliability, access to electricity, issues pertaining to socio-economic
groups, rights of the consumers and dispute resolution. Above all, they
expect some authority to listen to their concerns and understand the
issues at hand. Let’s examine how the PUCSL Acts to protect the
interests of electricity
consumers.
a) Fair pricing
Lighting up |
* Sri Lanka
Electricity Act no. 20 enacted in 2009
* Benefits to all stakeholders
* CEB legally bound to roll out
expansion plans |
Prices should be fair for the both the consumers as well as the
service providers. This means that price regulation is intended to
restrict economically unjustifiable profits to the investors but still
provide them with a reasonable return on their investments.
The PUCSL is legally directed by the Sri Lanka Electricity Act to
follow the cost reflective pricing policy guidelines approved by the
Cabinet of Ministers. Cost reflective implies that only the cost of
efficient operations will be taken into account in determining the
tariff.
Furthermore, examining the objectives of the Commission under the
PUCSL Act, the Commission shall:
1. Protect the interest of all consumers
2. Ensure that price controlled entities acting efficiently do not
find it unduly difficult in financing their public utility industries
b) Quality and reliability
Quality and reliability of electricity supplied should comply with
supply and performance standards regulations.
Some examples of performance standards are, time taken in restoring
supplies after a fault, connecting a new premises to the grid, time
taken to respond to customer complaints, etc. whereas supply standards
consist of voltage, frequency etc. The PUCSL should make these standards
publicly available and all consumers must be educated in this regard.
It is expected that over a period of time these supply and
performance standards will be improved resulting in high quality and
reliable electricity supply to all. Therefore, these new legal
requirements will be highly beneficial for electricity consumers in
terms of the quality and reliability of their electricity supply in the
long-term.
c) Requirements of different socio- economic groups
This is a very important aspect in our society. Until the Sri Lanka
Electricity Act came into effect, there was no legal requirement to
consider concerns of different socio-economic groups. This includes
low-income support for the use of electricity.
The Act clearly indicates that the Cabinet of Ministers should
formulate policy guidelines considering the requirements of different
socio-economic groups, thus ensuring equal attention to all
socio-economic groups in Sri Lanka.
These policy guidelines will be implemented through the PUCSL. These
guidelines will be published and, as an advisor to the Government on
policy, the PUCSL needs to provide the information gathered through
public consultations and the Consumer Consultative Committee (discussed
later) to the Cabinet of Ministers in order to draw up policy
guidelines.
d) Rights and obligations of consumers
A majority of electricity consumers at present are not aware of their
associated rights and obligations. Therefore, it is highly important to
ensure that consumers are made aware of their rights and obligations.
One of the functions of the PUCSL is to publish a statement setting out
the ‘Rights and Obligations of Electricity Consumers.’ It is the duty of
the PUCSL to educate the general public on their rights and obligations
as electricity consumers.
e) Dispute resolution
Under the PUCSL Act as well as the Sri Lanka Electricity Act, the
PUCSL is required to formulate dispute resolution procedures for the
sector. The most common is a dispute between an electricity supplier and
a consumer. There was no independent third party to look into these
disputes and mediate to arrive at an acceptable solution for both
parties under the previous regulatory regime. Therefore, the PUCSL’s
role will be highly beneficial to consumers as well as suppliers.
f) Prospective consumers
There are around four million people, which translate to around 20
percent of the total population, without access to the grid electricity.
The electricity supply industry should consider this seriously and
provide them access as soon as practically possible. Previously there
were no incentives or legal requirements for the electricity suppliers
to extend their services to this group.
However, the PUCSL now intervenes to handle this issue; it is now
imperative for the CEB to submit to the PUCSL an electricity
distribution expansion plan indicating the geographical areas in which
it proposes to cover during a period of fifteen years to obtain the
licences. Therefore, during that period, the CEB is legally bound to
roll out the expansion plans. Hence, there is a definite time frame for
villages to obtain access to electricity and above all, it is ensured
through legislation.
g) Consumer Consultative Committee and Public Hearings
The Consumer Consultative Committee (CCC) shall be appointed by the
PUCSL according to the PUCSL Act. The main functions of the CCC are:
1. Monitor whether needs of consumer of goods or services provided by
any public utilities industry are being satisfied.
2. Promote awareness of the standards prescribed or determined under
the PUCSL Act and the rights of consumers with respect to those
standards.
This ensures that the public will be consulted on these requirements
and their concerns will be considered.
Previously, there was no such mechanism in place to obtain consumer
views and address consumer concerns.
Therefore, the new electricity regulatory regime with the PUCSL as
the regulator has empowered the existing as well as prospective
consumers of electricity. It is indeed a fair deal for electricity
consumers.
The writer is
Deputy Director General, Sri Lanka Public Utilities Commission .
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