Sri Lanka Electricity Act

• Coming into Force: 27 June 2024
• Year: 2024
• Act Number: 36
• Citation: No. 36 of 2024

AN ACT TO PROVIDE FOR THE IMPLEMENTATION OF REFORMS TO THE ELECTRICITY INDUSTRY; TO PROVIDE FOR THE ESTABLISHMENT OF THE NATIONAL ELECTRICITY ADVISORY COUNCIL; TO PROVIDE FOR THE PUBLIC UTILITIES COMMISSION OF SRI LANKA, ESTABLISHED UNDER THE PUBLIC UTILITIES COMMISSION OF SRI LANKA ACT, NO. 35 OF 2002 TO BE THE REGULATOR FOR THE ELECTRICITY INDUSTRY IN TERMS OF THIS ACT; TO PROVIDE LEGISLATIVE MEASURES APPLICABLE TO THE INCORPORATION OF CORPORATE ENTITIES UNDER THE COMPANIES ACT, NO.07 OF 2007 IN WHOM ALL ACTIVITIES CONNECTED TO THE GENERATION, TRANSMISSION, DISTRIBUTION TRADE, SUPPLY AND PROCUREMENT OF ELECTRICITY SHALL VEST; TO SPECIFY THE PROCESSES TO BE APPLICABLE TO ALL RELATED ACTIVITIES TO REPEAL THE CEYLON ELECTRICITY BOARD ACT, NO. 17 OF 1969 AND THE SRI LANKA ELECTRICITY ACT, NO. 20 OF 2009 AND TO PROVIDE FOR ALL MATTERS CONNECTED THEREWITH OR INCIDENTAL THERETO.PreambleWHEREAS the need for reforms to the existing institutional framework of the Electricity Industry which duly recognises the need, and is designed to attract new investment into the Electricity Industry supported by segregation and separation of the activities of the Electricity Industry currently vested in a single Government owned entity by the incorporation of independent corporate entities in whom shall be vested all activities connected with the generation, transmission distribution, trade, supply and procurement of electricity and who shall be responsible for the efficient management of these activities and for the creation of market competition in these activities:AND WHEREAS a process commencing with the preparation of a scheme for the transition and reorganisation of the Electricity Industry and the implementation of identified reforms based on timely and essential legal, structural oversight and market based changes; the reforms seek to ensure financial self-sufficiency of the corporate entities to be established under this Act, through a transparent system of tariffs, transparent financial, investment and resource management and improved accountability and oversight measures, to facilitate private sector investment in every activity of the Electricity Industry using stock market listing and public private partnership modalities:AND WHEREAS it is also necessary to recognise the Government of Sri Lanka’s commitment to the evolution of the Electricity Industry through the implementation of its decarbonisation goals, climate change policies and the enhancement of the contribution of renewable energy to the generation of electricity facilitated by modern technology and processes to optimise generation of energy from domestic renewable energy sources to minimize the dependence on imported fossil fuel sources and adaption of emerging technologies in energy conversion, storage and management to facilitate the integration of renewable energy and to promote competition amongst alternate processes of generation of electricity in an efficient and transparent manner:NOW THEREFORE, BE it enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows: -

Short title and dates of operation1. (1) This Act may be cited as the Sri Lanka Electricity Act, No. 36 of 2024.(2) The provisions of this Act other than the provisions of this section, section 2, section 3, section 4, section 9, subsection (1) of section 10, paragraph (b) of subsection (2) of section 10, subsection (3) of section 10, subsection (5) of section 10, section 14, section 15, section 17, section 18, section 38, section 39 and the sections specified in subsection (4) of this section shall come into operation on such date as shall be appointed by the Minister by Order published in the Gazette (hereinafter referred to as the "appointed date"):Provided that, prior to making such Order, the Minister shall be satisfied that the Preliminary Transfer Plan, the National Electricity Policy, including the National Tariff Policy, the Annual Power Procurement Plan and the Long Term Power System Development Plan have been prepared, approved and are in place in accordance with the provisions of this Act:Provided further, if no appointed date is published in the Gazette as required by this subsection even though the Minister is satisfied that the requirements in the first proviso have been met, the provisions of this Act, other than the provisions of this section, section 2, section 3, section 4, section 9, subsection (1) of section 10, paragraph (b) of subsection (2) of section 10, subsection (3) of section 10, subsection (5) of section 10, section 14, section 15, section 17, section 18, section 38, section 39 and the sections specified in subsection (4) of this section shall come into operation immediately upon the expiry of twelve months from the date on which the Bill becomes an Act of Parliament.(3) The provisions of this section, section 2, section 3, section 4, section 9, subsection (1) of section 10, paragraph (b) of subsection (2) of section 10, subsection (3) of section 10, subsection (5) of section 10, section 14, section 15, section 17, section 18, section 38 and section 39 shall come into operation on the date on which the Bill becomes an Act of Parliament.(4) The Minister may, taking into consideration the special circumstances required by this Act to be created or fulfilled for the implementation of the provisions specified in paragraphs (a) and (b) of this subsection, appoint by Order published in the Gazette, different dates for the coming into operation of each of such sections as follows:- (a) the date from which the provisions of section 13 relating to open access shall come into operation; and(b) the date from which the provisions of Part IX relating to the Wholesale Electricity Market shall come into operation.(5) Every Order made in terms of subsection (4), shall within ninety days from the date of publication of the relevant Order in the Gazette be placed before Parliament: Provided that, the Orders required to be made in terms of subsection (4) shall be made before the expiry of a period of five years from the date on which the Bill becomes an Act of Parliament. If no Order has been made within this period of five years, the provisions of the sections referred to in subsection (4) shall be deemed to come into operation on the date on which the said period of five years expires:Provided further, the Minister may, at any time within three months prior to the expiration of the said five years, with the approval of the Cabinet of Ministers extend such period, by Order published in the Gazette for another period of one year at a time so however, the aggregate period of such extensions shall not exceed five years.

PART IOBJECTS OF THE ACT

Objects of the Act2. The objects of this Act, in relation to the generation, transmission, distribution, trade, supply and procurement of electricity shall be - (a) to ensure improved Electricity Industry performance through independent and accountable corporate entities responsible for the provision and maintenance, of a well-coordinated, efficient and economical system of electricity supply throughout Sri Lanka at all times, through transparent policies;(b) to facilitate the establishment of independent and accountable corporate entities for the efficient supply of electricity throughout the country and to protect the interests of the consumers;(c) to promote and facilitate the establishment and functioning of the Wholesale Electricity Market;(d) to promote competition in the Electricity Industry by eliminating preferential treatment and barriers to entry, allowing open competitive procurement of new generation capacity including renewable energy, implementing transparent, merit order dispatch of generation capacity and providing non-discriminatory access to the transmission network for all types of generation technologies and consumers;(e) to ensure that entities to whom licences have been granted under this Act (hereinafter referred to as "licensees") will act efficiently in carrying out the activities authorised or required by the respective licences issued to them;(f) to ensure that all reasonable demands for electricity, including future requirements for electricity are met, whilst ensuring efficient use of electricity supplied to all premises;(g) to protect the public from dangers arising from the generation, transmission, distribution, trade, supply and procurement of electricity by improved safety standards, reliability and quality of services;(h) to identify the tariff principles to ensure affordability of electricity to all consumers and financial viability of licensees; and(i) to provide for the decarbonization of the Sri Lankan Electricity Industry and the promotion of renewable energy and energy integration in accordance with Sri Lanka’s national policies and its international obligations whilst ensuring optimal use of natural resources.

PART IINATIONAL ELECTRICITY ADVISORY COUNCIL, THE NATIONAL ELECTRICITY POLICY AND THE ISSUE OF POLICY GUIDELINES

Establishment of the National Electricity Advisory Council3 (1) There shall be established for the purposes of this Act, a Council which shall be called and known as the "National Electricity Advisory Council" (hereinafter referred to as the "Council").(2) The Council shall by the name assigned to it by subsection (1), be a body corporate and shall have perpetual succession and a common seal and may sue and be sued by such name.(3) (a) The Council shall be charged with the responsibility of advising the Minister in formulating the national electricity policy in respect of - (i) matters relating to the Electricity Industry and formulation of the national electricity policy in terms of section 4 of this Act;(ii) matters relating to the implementation of the Electricity Industry...