IRC, DOMLEC to settle disagreement in court

ircDominica’s sole electricity company, DOMLEC, and the Independent Regulatory Commission (IRC) will head to court this September to settle a disagreement as it relates to the percentage for the Weighted Average Cost of Capital (WACC) and the return on equity.

Regulation Manager at the IRC, Francis Paul, told DNO that the commission, after deliberation and a consultation, offered 10.44 percent on return of equity and 8.56 percent of WACC to DOMLEC.

However, the electricity company asked for 14.5 percent on return of equity and 11.6 percent of WACC instead.

“DOMLEC wasn’t in agreement so they appeal the decision to the Commission, but the Commission looked at the appeal and didn’t see any grounds to change its decision,” Paul explained. “So in its licensing arrangement, if they feel aggrieved, they have the right to go to court and that’s what they chose.”

He mentioned that this is the first time that an organization in Dominica like the IRC will be looking at rates. however, “the returns given is going to affect the rates one way or the other and DOMLEC itself has a responsibility to its share-holders, but the IRC has a greater responsibility, which is not only to DOMLEC, but also to the consumers and the country as a whole.”

The IRC is standing by its decision.

“If you make a decision, you have to stand by your decision and we believe that the return on the offer is fair, to take into consideration everything,” Paul said.

All attempts to contact the Public Relations Officer (PRO) for DOMLEC Adina Bellot-Valentine were unsuccessful. However, DNO will continue our attempts to get a comment from the company.

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4 Comments

  1. Man kind
    August 13, 2015

    But why raise costs when they make 14 million a year in net profits after expenses they getting greedy now .

  2. NRT
    August 13, 2015

    I support the The IRC and it needs to stand its ground. After all, Domlec is one of The major reasons foreign businesses do not set up shop here. Costing Dominica in direct foreign investment, millions more than they are taking now. Just ask shopkeepers how much they pay to Domlec for electricity, rediculous amounts.
    This monopoly needs to be broken up by any means necessary. This is why I suggest the gov’t find financing to buy Domlec back at any opportunity. This would mean job creation in a major way in the long rum for Dominica. Keep the pressure on, force them to sell and Buy it back.

    • Mahaut Boy
      August 13, 2015

      you clearly do not understand how electricity in dominica works, if you can’t google it our situation is not that different from other islands…

      i personally dislike domlec and their rates but its basically a necessary evil otherwise most people would not be interested in investing in a centralized power company… either way what the government should be doing is wising up and investing in decentralised power generation via solar… our cost of distribution over our big mountains and valleys is a key component to why we are so expensive…

  3. DFR
    August 12, 2015

    IRC offering looks reasonable to me. Electric usage is a vital and major source of power for the economy. Domlec being the sole provider already has a monopoly and the people should be held hostage just because shareholders expect a significant return on their investment . That is why we must be careful when we privatize essentials such as water and electricity . If there are several companies then it is ok. Anything else is not.

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