26.(1) The holder of each licence granted
under this Act shall observe the methodologies and procedures specified by the Commission
from time to time in calculating the expected revenue from charges which it is permitted
to recover pursuant to the terms of its license and in determining tariffs to collect
(2) The Commission shall, save as provided in sub-section (3), be entitled to prescribe the terms and
conditions for the determination of the licensees revenue and tariffs by regulations duly
published in the Gazette and in such other manner as the Commission considers appropriate
and, for doing so, the Commission shall be bound by the following parameters, namely:
the financial principles and their applications provided in sections 57 and 57-A of the
Electricitv (Supply) Act, 1948 and in the Sixth Schedule thereto:
the factors which would encourage efficiency, economic use of the resources, good
performance, optimum investments, performance of license conditions and other matters
which the Commission considers appropriate for the purposes of this Act; and
the interest of the consumers.
(3) Where the Commission departs from factors specified in
the Sixth Schedule to the Electricity (Supply) Act, 1948 while determining the licensees'
revenues and tariffs, it shall record the reasons therefore in writing.
(4) Every licensee shall provide to the Commission at such
time and in such manner as may be prescribed in the regulations, full details of its
calculation for the ensuing financial year of the expected aggregate revenue from charges
which it believe to have been permitted to recover in accordance with the terms of its
licence and thereafter it shall furnish such further information as the Commission may
reasonably require to assess the licensee's calculation. Within ninety days of the date on
which the licensee has furnished all the information that the Commission requires, the
Commission shall notify the licensee either:
that it accepts the licensee's calculation; or
that it does not consider the licensee's calculation to he in accordance with the
methodology or procedure in its licence and such notice to the licensee shall.
specify fully the reasons why the Commission considers that the licencee's calculation
does not comply with the methodology or procedures specified in its license or is in any
way incorrect; and
propose a modification or en alternative calculation of the expected revenue from
charges, which the licensee shall accept.
(5) Each holder of supply licence shall publish in the
daily newspaper having circulation in the area of supply and make available to the public
on request the tariff or tariffs for the supply of electricity within its licensed area of
supply and such tariff or tariffs shall take effect only after seven days from the date of
such publication. Any tariff implemented under this section,
shall not show undue preference to any consumer of electricity, but may differentiate
according to the consumer's load factor or power factor the consumer's total consumption
of energy during any specified period, or the time at which supply is required;
shall be just and reasonable and be such as to promote economic efficiency in the supply
and consumption of electricity; and
shall satisfy all other relevant provisions of this Act and the conditions of licence.
(6) No tariff or part of any tariff implemented under sub-section (5) may be amended more than once in any financial
year except in respect of any changes expressly permitted under the terms of any fuel
surcharge formula as may be prescribed by regulations. At least three months before the
proposed date for implementation of any tariff or an amendment to a tariff the licensee
shall provide details of the proposed tariff or amendment to a tariff to the Commission,
together with such further information as the Commission may require to determine whether
the tariff or amended tariff would satisfy the provisions of sub-section
(5). If the Commission considers that the proposed tariff or amended tariff of a
licensee does not satisfy any of the provisions of sub-section
(5), it shall, within ninety days of the receipt of all the information) which it
required, and after consultation with the Commission Advisory Committee constituted under
section 32 and the licensee, notify the licensee that the proposed tariff or amended
tariff is unacceptable to the Commission and it shall provide to the licensee an
alternative tariff or amended tariff which shall be implemented by the licensee. The
licensee shale not amend any tariff unless the amendment has been approved by the
7) Notwithstanding anything contained in sections 57-A and
57-B of the Electricity (Supply) Act, 1948, no Rating Committee shall be constituted after
the date of commencement of this Act and the Commission shall that licensees comply
with the provisions of their licenses regarding their charges for the sale of electricity.
both wholesale and retail, and for the connection to and use of their assets or systems in
accordance with the provisions of this Act.
Explanation - In this section.
"the expected revenue from charges" means the total revenue which a licensee
is expected to recover from charges for the level of forecast supply used in the
determination under sub-section (4) in any financial year in
respect of goods or services supplied to customers pursuant to a licensed activity; and
"tariff" means a schedule of standard prices or charges for specified services
which are applicable to all such specified services provided to the type or types of
customers specified in the tariff.