IRC and DOMLEC agree on new depreciation rates

The Independent Regulatory Commission (IRC) has released its comments on stakeholders’ responses to the consultation on DOMLEC’s depreciation study. The study aimed to update the depreciation rates for DOMLEC’s physical assets as part of the upcoming electricity rates.

A public consultation took place in February, focusing on the correct approach to determine the depreciation expense for DOMLEC’s physical assets. The IRC and DOMLEC have agreed on the remaining useful life method to calculate depreciation expense. Initially, the applied depreciation expenses resulted in an overestimation of $18.2 million. However, after further revision, the consulting teams concluded that a total depreciation expense of $12.7 million would be most accurate.

This proposed depreciation expense applies to DOMLEC’s assets in the categories of building and construction, standard machinery, network, tools and equipment, vehicles, office furniture, office equipment, and software.

The commission advised stakeholders that the higher the depreciation expense, the higher the rates of electricity to customers. Both the IRC and DOMLEC agree that the remaining useful life approach to calculating DOMLEC’s depreciation expense is sound, solid, and in line with international best practice.

As of Friday, April 12, the IRC has been circulating its comments on DOMLEC’s website and at its office. The second round for stakeholder feedback which closed on April 26 gave stakeholders a final opportunity to respond and state whether they have objections to the proposed approach to the depreciation study on May 31st. This decision will guide the next steps in the ongoing review of electricity rates.

The consultative document for DOMLEC’s Depreciation Study is posted below.

Download (PDF, 651KB)

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  1. putin
    May 1, 2024

    you guys seeing how they increase the depretiation of DOMLECS assets .
    soon you all will hear domlec was sold they already have a buyer for domlec. so they gonna lower the worth of the company till they can sell it to someone and they getting there cut on the side from the buyer

  2. Zandoli
    April 30, 2024

    It seems like Domlec is only depreciating its assets on paper since they allow their generators to operate several years beyond their useful lives using duct tape and chewing gum to hold them together.

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