TARIFF ADJUSTMENT APPLICATION Lesotho Electriciy Authority关税调整中的应用莱索托电力局.pptVIP

LEC TARIFF ADJUSTMENT APPLICATION 2010/11 MASERU, 13 APRIL 2010 PRESENTATION LAYOUT Introduction Background on LEC Challenges facing LEC Key Drivers for tariff adjustment Revenue Requirement Proposed tariff schedule Affordability INTRODUCTION LEA act requirement Composite license Fifth submission since regulation BACKGROUND LEC is vertically integrated with a small generation , transmission and distribution Bulk suppliers; ‘Muela, ESKOM and EDM 100% state owned company Five divisions; Engineering, Commercial, Corporate functions, Finance and Corporate services Governed by Board of Directors CHALLENGES REGIONAL POWER SHORTAGE UNDERINVESTMENT IN THE DISTRIBUTION NETWORK POOR SETTLEMENT PLANNING SHORTAGE OF CAPITAL LOW CONSUMING CUSTOMERS HIGH STAFF TURNOVER OVER RELIANCE ON IMPORTS KEY DRIVERS FOR TARIFF ESKOM TARIFF ADJUSTMENT (24.8%) EDM INCREASE (12%) INCREASE IN OPERATIONAL COSTS INFLATION DEPRECIATION GROWTH DYNAMIC REVENUE REQUIREMENT Cost of Sales M157 m Operations and Maintenance M246 m Return on assets M 19 m Total M422 m RECOMMENDATION LEC recommends that Board of Lesotho Electricity Authority approves a revenue requirement of M422 million. PROPOSED TARIFF INCREASE PROPOSED MAXIMUM DEMAND CHARGES AFFORDABILITY AS PER HBS HOUSEHOLD SPENT M186 ON POWER AND RENT MOSTLY RENT IS M100 ASSUME M86 TO BE SPENT ON POWER 110 ELECTRICITY UNITS WHICH ARE ENOUGH FOR COOKING AND LIGHTING FOR A MONTH COMPARATIVELY GAS IS 16% MORE EXPENSIVE THAN ELECTRICITY PER KWH. * * * * * * * * * * * * * * * * * * * * * *