In efforts to attaining cost-reflective electricity pricing, the Liberia Electricity Regulatory Commission (LERC), with the support of the Millennium Challenge Account Liberia (MCA-L), has begun a Cost of Service Study (COSS).
The information will enable LERC to more effectively determine appropriate tariff regulations for the electricity sector.
A global engineering consulting company, Tetra Tech, is conducting the study and with a deadline to provide the final deliverables by November 30 2020.
Among the deliverables, Tetra Tech will produce reports on the structure and performance of Liberia’s power sector, a willingness to pay survey, an economic cost of electricity supply report, and a cost-reflective pricing model.
These reports will be presented and discussed at workshops of relevant stakeholders from Liberia’s electricity sector.
Significance of cost reflective electricity pricing
MCA-L’s director of energy, M. Hady Sherif, described the COSS as critical to ensuring that LERC has appropriate and adequate data to make decisions during regulatory review of tariff proposals and tariff determination for effective regulations.
“It is imperative that an electricity Cost of Service Study be undertaken to determine the actual and efficient cost of supplying electricity with a view of transitioning to cost-reflective electricity pricing,” Sherif added.
Sherif noted that Tetra Tech has already developed and submitted a contingency and risk management plan to enable the company to implement the project amid the COVID-19 pandemic.
According to Sherif, the company is ensuring that all tasks are being conducted in line with advisories and restrictions provided by local and international health authorities.
The company has also rescheduled field data collection for the Willingness to Pay Survey and Electrical Energy Demand Study to commence upon the ease of restrictions on movement in Liberia.