Issues Arising From Domlec’s 2011 Annual Report And Utterings From Domlec’s Chairman Published In The Chronicle Of April 27, 2012
An Uncertain Regulatory Environment
The Chronicle of April 27, 2012 reported the Chairman of DOMLEC, Mr. Robert Blanchard saying “there are still many challenges…..including continuing pressure on fuel prices and an uncertain regulatory environment.”
The issue of fuel prices has just been dealt with. The Commission finds the statement about the regulatory environment being uncertain very disconcerting. The IRC has, for the last four years, been working on establishing a regulatory environment for the electricity sector. To this end, the Commission has published the rules by which it will operate and a number of documents laying down rules and procedures for dealing with every issue that could occur in the sector. Because of this, the IRC finds the allegation of uncertainty made by Mr Blanchard disturbing and would certainly wish the Chairman of DOMLEC to point out the area(s) of uncertainty.
Unresolved Differences in the Tariff Structure and Licensing Regime
The Commission is not aware of the differences alluded to by DOMLEC’s Chairman. A Tariff Regime, to which DOMLEC made significant inputs, was agreed to and published two years ago. The Tariff Regime sets out the procedure and requirements for making tariffs under the new dispensation. The Commission ensured that DOMLEC got a copy of it. The IRC is not aware that there exists unresolved differences.
As regards the Licensing Regime, the Commission has been trying to persuade DOMLEC since July 2010 to begin negotiating new licences for Generation and Transmission, Distribution and Supply since DOMLEC’s present licence expires on December 31, 2015.
In order to further the process the IRC submitted draft copies of the licence documents to DOMLEC on January 12, 2011. Suffice it to say that the Commission’s best efforts were frustrated by DOMLEC’s reluctance to engage with the Commission on this issue. Since the Electricity Supply Act (ESA) No. 10 of 2006 did not allow the Commission to compel DOMLEC to enter negotiation, the IRC embarked on the process of creating a licensing regulation to ensure that negotiations for new licences begin sufficiently in advance of the expiry date of DOMLEC’S present licence. The regulation is still out for public comment.
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