The Independent Regulatory Commission (IRC) has initiated a public consultation process to determine an appropriate Weighted Average Cost of Capital (WACC) for Dominica Electricity Services Ltd. (DOMLEC). The outcome of this consultation will lead to IRC’s final decision on the WACC. The WACC simply signifies the required return for the company to satisfy its investors, encompassing both debt and equity holders.
This return will determine the compensation received by DOMLEC’s shareholders for the capital invested in the company. The WACC will be applied in calculating tariffs for the upcoming three-year period. This marks the second public consultation concerning the Electricity Tariff/Rate Review, the first occurring earlier this year.
Other crucial decisions to be made by IRC before considering new electricity rates include DOMLEC’s five-year investment plan, revenue requirements, rate base, load research, and cost-of-service evaluations. Subsequently, the rate proposal will outline the new rates customers will pay during the three-year tariff period.
A consultation paper has been released for feedback from stakeholders, outlining the decisions made by both the Commission and DOMLEC regarding the WACC. A face-to-face consultation is scheduled for August 14, 2024, at the Dominica Public Service Union Building, where representatives from IRC and DOMLEC will present their perspectives on this matter.
The consultation document regarding DOMLEC’s WACC is available at https://www.ircdominica.org/consultative/. IRC’s proposed determinations, along with relevant consultation queries, can be found starting at page 17. Stakeholders are encouraged to provide responses by August 16, 2024.
IRC is set to announce its final decision on September 27, 2024.
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