Electric power supply industries have been nationalized in Burma since 1951. Burma's population has low access to electricity when compared to countries like Thailand and the Philippines. In addition to constructing the necessary transmission and distribution lines to ensure effective use of the existing and committed generation plants, emphasis must be placed on reducing system losses and establishing an effective planning function in Electric Power Corporation and rationalizing tariffs. The existing tariffs are well below long-run marginal cost (LRMC), with the greatest distortion being caused by the absence of a capacity charge. The proposed new tariff is a transitional one that will help to bring the existing distorted and low tariff structure more into line with strict LRMC, as well as with other policy objectives. For the shadow priced calculations, strict LRMC is first estimated in border prices using the usual World Bank methodology and appropriate conversion factors applied to market prices.