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regulatory materials>> Economic regulation
Economic Regulation

 

Power LinesBased on the duties and functions set out for the LEA in the LEA Act, the Authority approves the prices and tariffs at which electricity is supplied and sold.


In exercising economic regulation, the LEA has to ensure the financial viability of regulated electricity undertakings. This indicates that a fundamental principle of the objective of the LEA'S tariff setting is to ensure that the licensee's regulated activities are fully funded from its tariff revenues. The LEA must therefore periodically review the revenue requirements of each licensed business.


Tariff level settings and structure shall be set and reviewed in accordance with the LEA regulations as amended from time to time. At each periodic review, the LEA will not only review and revise the revenue requirement of the business, but must consider whether the form and structure of the controls remain valid, or require modification to continue to meet their objective.


LEA is also to approve prices for grid and off-grid electrification in rural areas (i.e. areas outside LEC's service territory). A less formal and stringent regulatory approach is to be adopted in such cases to promote rural access.

 

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