1. The Economic Regulation (ER) division consists of three staff members:

    2. Responsibility
    The Economic Regulation (ER) department is responsible for the effective regulation of the electricity supply industry through the provision of efficient economic and financial guidelines and advice to the Board and stakeholders.

    The department is responsible for the development of the industry’s tariff systems and methodologies in line with Government Policies and Legislations. The department is responsible to review, calculate and determine generation, transmission and distribution tariffs for the electricity industry and approval of revenue requirements. The department further evaluates and assesses the impact of the ESI on the economy and the end consumers. Create an enabling environment for private sector investment in the electricity industry.

    3. Activities under department
    • Advice on economic, financial and tariff related matters
    • Determine the regulated return for utilities
    • Determine generation, transmission and distribution tariffs by reviewing the submitted revenue requirements for cost effectiveness
    • Ensures tariffs proposed by licensees are in line with Government Policies and in line with applicable regulations and standards
    • Make recommendations to Exco, Board and Minister on tariffs matters
    • Draft guidelines for electricity generation, transmission and distribution tariff setting and review
    • Monitoring the impact of the electricity supply industry on the economy
    • Conduct financial and economic reviews for license application and determine applicable tariffs
    • Monitoring and promoting competition in the industry
    • Promoting investment in the energy sector
    • Protection of consumer interests, in terms of affordability and sustainability of electricity services
    • Address tariff related customer complains
    • External stakeholder interactions, including RERA (Current Chairperson of Economic Regulation Subcommittee

    4. Regulatory tools used

    4.1 Regulations
    4.1.1 Economic regulations (draft) (Legal drafters)
    The objects of the Economic Regulations are –

    1. to ensure the efficient functioning and development of the electricity industry, efficient electricity provision; and (iii) security of electricity provision
    2. to ensure that electricity tariffs and charges allow licensees a reasonable rate of return in accordance with these Economic Rules and the Board’s tariff methodologies in order to assure that licensees are able to finance the electricity services and activities of their licensed undertakings
    3. to establish an environment where the Board can effectively exercise control over, monitor and enforce the economic regulation of electricity

    4.2 Rules

    4.2.1 Resellers rules (draft)
    The objects of these Rules are –

    1. to establish a regulated environment within which redistribution of electricity can take place in order to ensure the efficient conveyance and delivery of electricity under exempted circumstances
    2. to ensure that the interests of clients, supplying licensees and other electricity licensees operating in the same area as a redistributor are sufficiently protected as regards pricing, safety and standards on quality of electricity provision and service of electricity so delivered

    4.2.2 Net Metering rules (draft) (Legal drafters)
    The objects of net metering are –

    1. the generation of additional power into the national grid, reducing the investment requirements of utilities and conventional independent power producers
    2. to allow customer-generators to reduce their imports from distribution networks through generating for own consumption
    3. to allow customer-generators to export to distribution networks up to the customer-generators' imports from distribution networks
    4. the promotion of sustainable renewable energy sources, small scale investments, value addition and electricity market development

    4.2.3 Renewable Feed in Tariff (REFIT) rules (draft)
    The objective of the Rules is to reach a level of clarification from the outset so that the REFIT Program’s message to the private developers is “if you build it, we are obligated to buy it at the pre-determined price” as long as they put together a Viable Project.

    4.3 Policies
    National Connection Charge Policy
    The overall objective of the National Connection Charge Policy is to establish a standardised approach to dealing with power network connections and associated connection charges.

    4.4 Tariff Methodologies
    The department uses a rate of return tariff methodology for the calculation of tariffs (generation, transmission and distribution) as per recommendations of the National Tariff Study of 2001, detailed methodologies are approved and are currently being used with specific models developed such as; NamPower Application review Model and Operating and Reporting Manual (ORM) for Generation and Transmission and Distribution tariff reviews respectively.

    Economic Regulation Documents