අනේ හුකේ නන්නානේ...
As a teacher of regulation, I am pleased that the PUCSL statement reflects the theoretically correct position on how costs that are not reasonable should be treated by a regulatory agency. If one follows this logic, the unreasonable costs incurred as a result of ineptitude/corruption in the procurement of coal would not be reflected in the tariff. That leaves two entities exposed to the disallowed costs.
The purchaser of coal can invoke clauses in the contract and ask the supplier to cover the costs caused by the low-quality and delayed coal shipments. But these kinds of damages are very precisely defined in the contract. That means that all the disallowed costs may not be recovered by this means. There is also the possibility of the matter ending up in arbitration or in the courts.
For the costs that cannot be clawed back through enforcement of contract conditions and the costs of delay, there is only one entity that can bear them: Treasury or the taxpayers of Sri Lanka. One may ask why the company (Lanka Coal, LCC) cannot absorb the costs. It is a 100% state-owned enterprise. The costs would have to be covered using funds from the owner, because it is unlikely that the amounts required will be in the fixed deposits of LCC.
"In a statement issued today, the PUCSL said only reasonable costs incurred for the generation, transmission, and distribution of electricity are taken into account when considering tariff revision proposals.
The Commission noted that even in the most recent electricity tariff revision decision, additional costs linked to the coal situation or any other unreasonable expenditure were not approved.
It further said the Commission has unanimously decided that any extra costs arising from the coal situation, or other unfair expenses, will continue to be excluded from future electricity tariff revision proposals."
