Background
31 July 2012
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Background
On 29 January 1991 the cabinet passed a resolution approving the Automatic Tariff Adjustment Mechanism in order to have the actual costs reflected by the tariffs and to reduce impact of the fuel price volatility on the power utilities’ financial status. Thus, the power utilities can adjust electricity tariffs to correspond with the changing actual costs which are beyond their control.
The monthly tariff collected from customer will comprise two parts, the base tariff and the tariff derived from the Automatic Adjustment Tariff Adjustment Mechanism formula.
The base tariff was performed on the assumptions pertaining to fuel price, inflation rates or consumer price index (CPI) , foreign exchange rate and efficiency improvement of the transmission , distribution and retail businesses.
The Automatic Adjustment Tariff Adjustment Mechanism formula is allowed pass-through to customers only of changes in strictly uncontrollable costs that be calculated in base tariff.
The monthly tariff collected from customer will comprise two parts, the base tariff and the tariff derived from the Automatic Adjustment Tariff Adjustment Mechanism formula.
The base tariff was performed on the assumptions pertaining to fuel price, inflation rates or consumer price index (CPI) , foreign exchange rate and efficiency improvement of the transmission , distribution and retail businesses.
The Automatic Adjustment Tariff Adjustment Mechanism formula is allowed pass-through to customers only of changes in strictly uncontrollable costs that be calculated in base tariff.
