We’re doing some things
The following are excerpts from a speech delivered by Joseph M. Matalon, chairman of the Office of Utilities Regulation, last week at the 14th annual conference of the Organisation of Caribbean Utility Regulators in Montego Bay, St James.
AS I am sure you will hear from the relevant sector ministers’ presentations, the water and telecommunications sectors are also having their moments in the sun.
It is also fitting that the conference is being held at a time when the International Monetary Fund, just three weeks ago (October 8), recognised Jamaica as possessing the best infrastructure strategy in the Caribbean. With all of this, it would not be immodest to say we are doing some things right.
That said, however, we accept that like the little one in Robert Louis Stevenson’s poem, “we still have many more miles to go” – and I end it there, because sleeping is not at all in our contemplation.
We see in the road ahead abounding opportunities. Notably, the advent of new technologies such as smart metres opens up a plethora of options for enhanced choices and controlled costs. At one point it was true to say that compared with the telecommunications infrastructure, the electricity grid had remained relatively unchanged for more than a century. That, however, is no longer the case. The grid now shares and indeed converges the action with its ICT counterpart. All of this has spawned new challenges, evident in rapidly evolving consumer expectation and independence, new business models and an increasing requirement for defter regulatory interventions.
Research has shown that falling costs and increasing interest in technologies for improved efficiency, triggered by solar power and net metering, are factors that are leading to changes in the electric utility industry, comparable to those experienced by the telecommunications industry starting in the late-1970s. At the same time, innovative energy service suppliers have appeared, disrupting relationships between traditional utilities, regulators and customers.
As customers depart from the grid and provide their own power needs, the departing customers’ share of utility costs fall on fewer customers, raising their rates, so more of them depart. Such are some of the challenges that regulators face around the region and which we as regulators must strive to address in the public interest.
But there are also many opportunities. Globally, many utilities perceive that they are carrying a relentlessly increasing regulatory burden. In established markets, these regulations are driven by market reforms and a move towards competition in all aspects of utility operations. In regions experiencing rapid infrastructure growth, regulation typically increases as wholesale and retail markets become more complex. In such circumstances, the experts recommend that utilities better manage their regulatory obligations.
Keeping abreast of frequent changes in regulation is key, as is the ability to effectively communicate with all stakeholders about exactly how these changes will affect prices.
Despite efforts by many utility operators to enhance customer processes such as metering, billing and complaint
Joseph M. Matalon Consumers have already benefited substantially from competition in terms of lower prices for telecommunication services, an improved basket of prices, wider choice, rapid offer of a number of new technologies, especially broadband services, and higher quality of services. KEY FACTOR TO SUCCESS