Prime Minister Roosevelt Skerrit has revealed that his government purchased the majority shares of the Dominica Electricity Company Limited (DOMLEC) for US$5 million or EC$13.5 million.
The Prime Minister made the announcement during the Third meeting of the Second Session of the Tenth Parliament on Monday.
He said this followed months of intense and cordial negotiations with DOMLEC’s then majority shareholder, Emera Incorporated.
Skerrit said the government had previously informed Emera of its interest in acquiring its shares, however, the company was hesitant in divesting its shares in DOMLEC, “given that DOMLEC has been, year-after-year, generating profits, but much of the setbacks were caused by Hurricane Maria. However, this time around with government’s plans and significant progress towards transitioning to renewable energy, and the fact that very soon, with the commissioning of the Geothermal Power Plant in Laudat, DOMLEC will have to purchase the electricity generated by the Government of Dominica Geothermal Development Company (DGDC).”
“Emera proposed to sell the shares at the market price listed for DOMLEC shares on the Eastern Caribbean stock exchange which is EC$3.50 per share. At that price, government would have had to pay a total of EC$18.9 million for these shares,” Skerrit said. “However, I am happy to report to the house and the people of Dominica that following months of intense and cordial negotiations that government purchased the shares at a total of US$5 million or EC$13.5 million, which is 5.4 million or 28.6% less than the listed value.”
Furthermore, the Prime Minister stated that his government only bought back 51.9% of the shares, “which means that if the United Worker Party had not sold the 72% of the shares that government owns for $21 million, these shares would have been worth at least $26.3 million today,”
Skerrit mentioned that over the past 12 financial years, from 2009 to 2020, DOMLEC paid dividends totaling $24.8million.
“The only years during that period there were no dividends were in 2018 and 2019 because of Hurricane Maria,” he added. “Of the $24.8 million paid in dividends during 2009 and 2020, 72% or $17.9 million of this amount would have gone to government’s treasury to meet the needs of our Dominican people.”
He explained that the profits earned by DOMLEC over the period were much more than the $24.8 million paid in dividends.
“That is why we are confident that this was a decision fully in the interest of the people of Dominica,” the Prime Minister said.
Meantime, Skerrit contends that the United Workers Party (UWP) was mistaken and shortsighted when it sold the government’s 72% share ownership in DOMLEC on such generous terms.
He said DOMLEC was at the time a profitable company serving the interest of the people of Dominica.
In his address to parliament, the Prime Minister also announced that a new transmission network is being built to relieve pressure on DOMLEC’s network, reduce losses and increase reliability; allow for the efficient and resilient transmission of hydro-electricity from the Roseau Valley; and provide resilience to DOMLEC’s electricity network by minimizing the damage caused by hydro-meteorological events and allowing for the quick reinstatement of power in the event of damage.
He further addressed the impact of the Russia-Ukraine War on the current cost of petroleum and petroleum products, resulting in a corresponding increase in the cost of electricity.
“Your government is doing everything within its control to reduce the impact on families and businesses,” the Prime Minister declared. . “We have urged the Independent Regulatory Commission (the IRC) to accelerate its review on the electricity tariffs, while the Government continues to push on to build and commission the geothermal plant. We are confident that with a reduction in the tariffs by the IRC, we can experience a reduction in the electricity rates.”