As enacted

Contents

13. Replacement of section 43 of the principal enactment

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Section 43 of the principal enactment is hereby repealed and the following section is substituted therefor :—

43. (1) Subject to the provisions of section 8 of this Act, no person shall proceed with the procuring or operating of any new generation plant or the expansion of the generation capacity of an existing plant, otherwise than in the manner authorized by the commission under this section.

(2)

A transmission licensee shall, based on the future demand forecast as specified in the

Least Cost Long Term Generation Expansion

Plan prepared by such licensee and as amended after considering the submissions of the distribution and generation licensees and approved by the Commission, submit proposals to proceed with the procuring of any new generation plant or for the expansion of the generation capacity of an existing plant, to the

Commission for its written approval :

Provided however where on the day preceding the date of the coming into force of this Act :—

(a)

an approval of the Cabinet of

Ministers had been obtained to develop a new generation plant or to expand the generation capacity of an existing generation plant ; or

“Provision of new generation plant or the extension of any existing plant.

(b)

a permit had been issued to generate electricity through renewable energy resources by the Sri Lanka

Sustainable Energy Authority established by the Sri Lanka

Sustainable Energy Authority Act, No.

35 of 2007 under section 18 of that

Act, as a consequence of which the development of a new generation plant or the expansion of the generation capacity of an existing generation plant, has become necessary, the approval obtained or the permit issued, as the case may be, shall be referred to the

Commission for its approval. The

Commission shall, having considered the request made along with any supporting documents annexed thereto and on being satisfied that the necessary Cabinet approval had been obtained or a permit had been issued by the Sustainable Energy

Autohrity, as the case may be, prior to the coming into force of this Act, grant approval to the transmission licensee to proceed with the procuring of the new generation plant or the expansion of the generation capacity of its existing plant, as the case may be.

(3)

Where a person who is issued with a licence under section 13 of this Act to generate electricity of less than 25MW in capacity, proposes to expand its generation capacity of its generation plant as a consequence of which the generation of electricity would exceed 25MW in capacity, the approval of the

Commission under subsection (1) for such proposal shall not be granted, unless such person is a person who is qualified under subsection (1) of section 9 of this Act, to be issued with a generation licence.

(4)

Upon obtaining the approval of the

Commission under subsection (2), the transmission licensee shall in accordance with the conditions of its transmission licence and in compliance with any rules that may be made by the Commission relating to procurement, call for tenders by notice published in the

Gazette, to develop a new generation plant or to expand the generation capacity of an existing generation plant, as the case may be, as shall be specified in the notice :

Provided however, subject to the provisions of subsection (6) of this section, the requirement to submit a tender on the publication of a notice under this subsection shall not be applicable in respect of any new generation plant or to the expansion of any existing generation plant that is being developed :—

(a)

in accordance with the Least Cost Long

Term Generation Expansion Plan duly approved by the Commission and which has received the approval of the

Cabinet of Ministers on the date preceding the date of the coming into force of this Act and is required to be operated at least cost ;

(b)

on a permit issued by the Sri Lanka

Sustainable

Energy

Authority, established by the Sri Lanka

Sustainable Energy Authority Act,

No. 35 of 2007 under section 18 of that

Act for the generation of electricity through renewable energy sources and required to be operated at the standardized tariff and is governed by a Standardized

Power Purchase Agreement approved by the Cabinet of Ministers ; or

(c)

in compliance with the Least Cost Long

Term Generation Expansion Plan duly approved by the Commisssion having received the prior approval of the

Commission, for which the approval of the Cabinet of Ministers has been received on the baiss of :—

(i)

an offer received from a foreign sovereign Government to the

Government of Sri Lanka, for which the approval of the

Cabinet of Ministers have been obtained ; or

(ii)

to meet any emergency situation as determined by the

Cabinet of Ministers during a national calamity or a long term forced outage of a major generation plant, where protracted bid inviting process outweigh the potential benefit or procuring emergency capacity required to be provided by any person at least cost.

(5)

Upon the close of the tender, the transmission licensee shall through a properly constituted tender board, recommend to the

Commission for its approval, the person who is best capable of :—

(a)

developing the new generation plant or the expansion of the generation capacity of an existing generation plant, as the case may be, as specified in the notice published in the Gazette under subsection (4), in compliance with the technical and economic parameters of the transmission licensee ;

(b)

selling electrical energy or electricity generating capacity at least cost ; and

(c)

meeting the requirements of the Least

Cost Long Term Generation Expansion

Plan of the transmission licensee duly approved by the Commission, along with the draft Power Purchase

Agreement, describing the terms and conditions of such purchase.

(6)

Notwithstanding the fact that :-

(a)

an exemption from the submission of a tender is granted to any person under paragraphs (a), (b) or (c) of the proviso to subsection (4) ; or

(b)

a new generation plant or an expansion of the generating capacity of an existing generation plant is being developed in accordance with the Least Cost Long

Term Generation Expansion Plan duly approved by the Commission, by a person who had obtained the approval of the Cabinet of Ministers and which approval is force on the date of the coming into operation of this Act, the transmission licensee shall be required to negotiate with the person concerned to satisfy itself, that such person is capable of developing the new generation plant or the expansion of the generating capacity of an existing generation plant, as the case may be, in compliance with the technical and economical parameters of the transmission licensee and is capable of selling electrical energy or electricity generating capacity at least cost, and forward its recommendations for approval to the

Commission, along with the draft Power

Purchase Agreement or the draft Standardized

Power Purchase Agreement, as the case may be, describing the terms and conditions of such purchase.

(7)

The Commission shall be required on receipt of any recommendations of the transmission licensee under subsection (5) or subsection (6), as the case may be, to grant its approval at its earliest convenience, where the

Commission is satisfied that the recommended price for the purchase of electrical energy or electricity generating capacity meets the principle of least cost and the requirements of the Least Cost Long Term Generation Expansion

Plan and that the terms and conditions of such purchase is within the accepted technical and economical parameters of the transmission licensee.

(8)

For the purpose of this section-

“Least Cost Long Term Generation

Expansion Plan” means a plan prepared by the transmission licensee and amended and approved by the Commission on the basis of the submissions made by the licensees and published by the

Commission, indicating the future electricity generating capacity requirements determined on the basis of least economic cost and meeting the technical and reliability requirements of the electricity network of Sri Lanka which is duly approved by the Commission and published in the Gazette from time to time; and

“Standardized

Power

Purchase

Agreement” means an agreement entered into by the transmission licensee for the purchase of electrical energy or electricity generating capacity, generated using renewable energy resources under a permit issued by the Sri Lanka Sustainable

Authority, established by the Sri

Lanka Sustainable Energy Authority

Act, No. 35 of 2007, under section 18

of that Act.”.

Read on from s 14