TARIFF METHODOLOGY

Bulk Supply Consumers Directly Connected to the Transmission

System

Public Utilities Commission of Sri Lanka

October 2016

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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1 Introduction

In exercising the powers and functions vested with the Public Utilities Commission of Sri Lanka
(Commission) under section 3 (d) of the Sri Lanka Electricity Act, No. 20 of 2009 (SLEA) to regulate
tariffs and other charges levied by licensees and other electricity undertakings, in order to ensure
that the most economical and efficient service possible is provided to consumers, and in accordance
with section 30 (2) (a) of SLEA, the Commission has approved a Tariff Methodology.

Distribution Licensees are charged at the Bulk Supply Tariff determined according to the approved
Tariff Methodology. Condition 32 of Electricity Transmission and Bulk Supply License indicate the
requirement of differentiating between the charges for Distribution Licensees and Bulk Supply
Consumers who are connected to the transmission system at 220kV/132kV levels in addition to the
five Distribution Licensees.

Accordingly the following methodology, which is in par with the approved Tariff Methodology, is
proposed.

The Commission reviewed the proposed Tariff Methodology applicable for Bulk Supply Consumers
directly connected to the transmission system, hereby approved and requested the transmission
licensee to implement the Tariff Methodology effective from 1st October 2016.

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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2 Proposed Methodology

As per the Condition 32(2-e) of the Electricity Transmission and Bulk Supply License, Cost
components are separately identified for the calculation.
Cost components are;
a) the component related to electricity generation
b) the component related to the use of transmission system and
c) the component related to supply of electricity

2.1 Generation Cost

As per the Section 2.2 of the approved Tariff Methodology

2.2 Transmission Allowed Revenues

Allowed Revenue for Transmission Business and Bulk Supply and Operations Business are calculated
as per the Sections 2.3 & 2.4 of the approved Tariff Methodology.

2.3 Cost allocation

The cost supply is calculated according to the voltage level at which the supply is metered.

2.4 Energy Cost

Energy Cost will be passed on to each consumer taking into consideration the transmission loss
applicable to voltage level of connection and as per the time of their consumption.

2.5 Capacity Cost

Generation Capacity Cost is allocated at each voltage level considering the power loss along the
transmission system.
Transmission allowed revenues are allocated for each voltage level based on the share of fixed
assets at each level.

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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2.6 Tariff Determination

Considering the type of business, consumers connected to the transmission system can be
categorized into two groups as Independent Power Producers (IPP) and other consumers.
The proposed tariff is of two parts;
a) Capacity Charge
b) Energy Charge – in three time intervals as per the approved Tariff Methodology

2.6.1 Energy Charge (Rs/kWh)

Energy charge can be calculated by using the one of the below mentioned formulas.

 Energy Charge = (1+ TLF) x Generation Energy Charge

TLF - Transmission loss (%) up to the point of connection of the transmission consumers

 Energy Charge = (1- TLF) x Bulk Supply Tariff charge for the specified time interval

TLF - Transmission loss (%) from the point of connection up to the distribution level

2.6.2 Capacity Charge (Rs/KVA)

The capacity cost allocations as per 2.3.2, derive a capacity charge per kW of the demand coincident
on system peak demand.
In the case of transmission consumers, the transmission system should have reserved capacity to
cater for their maximum demand which can be occurred at any time.
Accordingly, in consideration with the load patterns and the reactive power usage of transmission
consumers, Capacity Charge will be charged on their maximum demand in kVA.
 Capacity Charge (Rs/kVA) = Capacity Charge (Rs/kW) / Av. Power Factor

In addition to Capacity and Energy charges, monthly Fixed Charge has to be charged to recover
metering, billing and other consumer related costs.

2.6.3 Bulk Supply Tariff for Distribution Licensees

When determining the BST applicable for Distribution Licensees, revenue to be collected by the
transmission consumers will have to be deducted from the Transmission Allowed Revenue.

2.7 The model calculation

The model calculation is based on the BST filing for October 2015- March 2016.

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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 2.7.1 Energy Charge
BST for Oct 2015- March
Proposed Tariff at 220kV /132kV
2016 (LKR/kWh)
(LKR/kWh) Loss *
Day 9.93 9.83 1.00%
Peak 12.80 12.68 1.00%
Offpeak 6.53 6.46 1.00%
* Losses – assumed

2.7.2 Capacity Charge (Rs/KW)

It is assumed that 40% of the fixed assets are assigned to supply power to the transmission
consumers.

2.7.2.1 Generation cost

Month Generation Cost Generation 2% At the point of connection Consumption 1% At the Distribution level
(Rs.) Capacity Loss of transmission consumers of Tr Loss
(MW) (MW) consumers (MW)
Capacity Generation cost (MW) Capacity Generation
(MW) per MW for Tr (MW) cost per MW
Consumers for DL
(Rs./MW) (Rs./MW)
Oct-15 4,268,638,106.31 1981.20 39.62 1941.58 2,198,541.66 8.87 19.33 1913.38 2,220,749.16
Nov-
4,247,983,153.82 1923.41 38.47 1884.94 2,253,637.88 8.35 18.77 1857.83 2,276,401.89
15
Dec-
4,273,678,106.31 1911.72 38.23 1873.48 2,281,140.07 10.72 18.63 1844.14 2,304,181.88
15
Jan-16 4,719,536,202.38 2101.40 42.03 2059.37 2,291,738.71 6.23 20.53 2032.61 2,314,887.59
Feb-16 4,661,452,366.12 2119.41 42.39 2077.02 2,244,299.19 8.71 20.68 2047.63 2,266,968.88
Mar-
4,712,101,881.24 2314.84 46.30 2268.55 2,077,147.15 11.53 22.57 2234.44 2,098,128.43
16

2.7.2.2 Transmission cost

Month 40 % of Generation 2% At the point of connection Consumption 1%
Distribution level
Transmission Capacity Loss of transmission consumers of Tr Loss
Cost (Rs.) (MW) (MW) consumers (MW)
Capacity Transmission (MW) Capacity 60 % of Transmissio
(MW) cost per MW (MW) Transmission n cost per
for Tr Cost (Rs.) MW for DL
Consumers (Rs./MW)
(Rs./MW)
Oct-15 292,026,489.72 1981.20 39.62 1941.58 150,406.85 8.87 19.33 1913.38 438,039,734.58 380,861.51
Nov-
292,026,489.72 1923.41 38.47 1884.94 154,925.75 8.35 18.77 1857.83 438,039,734.58 392,271.16
15
Dec-
292,026,489.72 1911.72 38.23 1873.48 155,873.54 10.72 18.63 1844.14 438,039,734.58 394,978.55
15
Jan-16 399,105,699.97 2101.40 42.03 2059.37 193,799.97 6.23 20.53 2032.61 598,658,549.95 490,284.44
Feb-
399,105,699.97 2119.41 42.39 2077.02 192,153.12 8.71 20.68 2047.63 598,658,549.95 486,461.09
16
Mar-
399,105,699.97 2314.84 46.30 2268.55 175,930.25 11.53 22.57 2234.44 598,658,549.95 445,630.09
16

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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 2.7.2.3 BSOB cost
Month 40 % of BSOB Generation 2% At the point of connection Consumption 1%
Distribution level
cost (Rs.) Capacity Loss of transmission consumers of Tr Loss
(MW) (MW) consumers (MW)
Capacity BSOB cost (MW) Capacity 60 % of BSOB cost
(MW) per MW for Tr (MW) BSOB Cost(Rs.) per MW for
Consumers DL (Rs./MW)
(Rs./MW)
Oct-
579,621,739.13 1981.20 39.62 1941.58 298,531.41 8.87 19.33 1913.38 869,432,608.70 755,943.78
15
Nov-
579,621,739.13 1923.41 38.47 1884.94 307,500.63 8.35 18.77 1857.83 869,432,608.70 778,589.96
15
Dec-
579,621,739.13 1911.72 38.23 1873.48 309,381.83 10.72 18.63 1844.14 869,432,608.70 783,963.66
15
Jan-16 358,079,875.22 2101.40 42.03 2059.37 173,878.42 6.23 20.53 2032.61 537,119,812.83 439,885.95
Feb-
358,079,875.22 2119.41 42.39 2077.02 172,400.85 8.71 20.68 2047.63 537,119,812.83 436,455.62
16
Mar-
358,079,875.22 2314.84 46.30 2268.55 157,845.61 11.53 22.57 2234.44 537,119,812.83 399,821.82
16

2.7.2.4 Total capacity cost per MW for Transmission customers

Total capacity cost per MW for Transmission customers = Generation cost per MW +
Transmission cost per MW +
BSOB cost per MW

Total capacity cost

per MW for
Month
Transmission customers
(Rs./MW)

Oct-15 2,647,479.92

Nov-15 2,716,064.25

Dec-15 2,746,395.44

Jan-16 2,659,417.11

Feb-16 2,608,853.16

Mar-16 2,410,923.01

Tariff Methodology for the Bulk Supply Consumers Directly Connected to the Transmission System
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