DOMLEC tariff review deferred

The IRC has outlined a number of reasons for putting of the tariff review
The IRC has outlined a number of reasons for putting off the tariff review

The Independent Regulatory Commission (IRC) has deferred Dominica’s sole electricity company, DOMLEC’s tariff review application, citing a number of reasons, among them: the 2015 constitutionally due general election.

Speaking at a press conference on Wednesday, Executive Director of the IRC Lancelot Mc Caskey, said that DOMLEC’s present license began on January 1, 2014, and according to Condition 33, the company should have submitted an application for review of its tariff on or before September 30, 2014.

“However, the commission has to be very mindful of its independent status now that general elections are likely to be held within the year,” he said. “Because of the mandated transparency requirements of the commission as well as the public interest which any price review generates, the conventional wisdom among regulators has been for them to avoid conducting public proceedings such as tariff reviews where the discussion itself would be politically charged and thus impact the objectivity of the inputs received.”

Mc Caskey also mentioned that the IRC took into consideration DOMLEC’s long term plans.

“The consideration and approval of the utility’s long term expansion plans and medium term investment program is a proceeding which the commission would wish to complete beforehand so that the related impact can be included in the tariff for submission,” he noted.

He also stated that greater clarity of the country’s geothermal generation development program and the consequential north-south transmission line infrastructure, “would help the process, and these issues will not and cannot be settled during this year.”

DOMLEC’s Transmission, Distribution & Supply (TDS) license and a mandated review of the tariff are expected every three years with annual adjustments for inflation, and because of “the impact of this major investments on capital requirements and on operational efficiency, it would be prudent to include these impacts in the tariff consideration,” according to Mc Caskey.

According to him, the commission is aware that the completion of the tariff’s review as soon as possible is desirable, but the risk of consumers of a tariff which does not include the anticipated efficiency gains and other improvements associated with the new investments is “undesirable.”

“It would be less risky to DOMLEC and consumers to continue with the existing tariff for another year than to introduce a new tariff based on incomplete and inadequate data,” Mc Caskey pointed out.

Because of these issues, Mc Caskey noted, a board meeting was held on May 22nd, 2014 and it was agreed to defer DOMLEC’s Tariff Review Application to May 1, 2015, however, the IRC “will continue to work with DOMLEC to determine the weighted Average Cost of Capital (WACC), the Asset Base and the long term expansion and medium term investment plans…”

“These are all critical issues for the tariff review which the commission hopes to conclude before the actual application is received,” he said.

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8 Comments

  1. Annon
    July 31, 2014

    IRC please help us with this monster, if you have teeth to bite, go ahead and do something. Please advise Gov’t to take over Domlec whether hostile or other means. Approach the Chinese for the funds especially in the coming of geothermal because Domlec will take whatever savings afforded by geothermal and still find ways to raise electricity for us all. We need to buy it back.

  2. Pondera
    July 31, 2014

    WOW, WOW, WOW! The deferring of the requested tariff is well calculated. No matter what argument used, those of us who can read know too well what the motive is. May the liberating spirits of our ancestors reign on this blessed land called Dominica. Amen!!

  3. brois
    July 30, 2014

    let us wait until election is over . . .then we will increase what ever amount we want . .skerrit is our boy ,we are not giving linton and his boys any opening . . .

  4. LISTENS!!!
    July 30, 2014

    We know the tariff is approved but deferred to give the current GOVT an upper hand in the up coming election.

    The economy is dead as result of the current administration. So Domlec cannot increase its revenue as a private entity therefore its only course of action is to increase TARRIFF on the poor people because no new businesses are coming to DA to increase consumption and existing ones are closing.

    The next pricing increases will be coming from the communication sector (Digicel, LIME, Marpin and SAT) because they are all experiencing the same stagnant or declining revenue problems as Domlec.

    Our country is collapsing and doing so fast as this administration is trying defer things so Dominicans won’t vote them out. But all these price increases will await us at the red gates when they regain power.

  5. #$$$$
    July 30, 2014

    Great all you ketch them!!!

  6. Morihei Ueshiba
    July 30, 2014

    Why should Domlec report to a commission this is nonsense! Domlec put up their capital, take all their risks and have to report to these guys for approval, this is not private business, more like state control communism. No wonder we don’t have alot of investors like free market countries like Hong Kong and Singapore.

    • Anonymous
      July 30, 2014

      Please inform yourself. Regulation is meant to mimic a competitive environment. Hong Kong and all the developed states have Regulatory Commissions

    • Get it together
      August 1, 2014

      This is pure uneducated talk. These people speaking on both sides of their mouth so what comes out is just gibberish. One one hand complain domlec is taking advantage, next side say domlec should be free to do as they lease for profit. Get it together!

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