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Friday ,November 21st, 2008 |
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Economic regulation |
| Economic
Regulation |
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Based
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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