ESA and Reg­u­la­tion

The Star (St. Lucia) - - LOCAL -

The ab­sence of a sin­gle, clearly de­fined, reg­u­la­tory body for the elec­tric­ity sec­tor in Saint Lu­cia has led some to sug­gest that the St. Lu­cia Elec­tric­ity Ser­vices Limited (LUCELEC) is un­reg­u­lated. How­ever, that is not the case. The pro­vi­sions for the reg­u­la­tion of the elec­tric­ity sec­tor are con­tained within the Elec­tric­ity Sup­ply Act (ESA), and th­ese pro­vi­sions are wide rang­ing. Ev­ery­thing LUCELEC does in­clud­ing how cus­tomers are billed for elec­tric­ity us­age, the gen­er­at­ing ca­pac­ity it must main­tain to meet na­tional de­mand, the guide­lines for the place­ment of poles on cus­tomers’ prop­er­ties, as well as which Gov­ern­ment De­part­ments are re­spon­si­ble for over­see­ing its op­er­a­tions is writ­ten in law and con­tained within that Act. This is also the case for the company’s min­i­mum rate of re­turn and the com­pu­ta­tion of the tar­iff and fuel cost adjustment fac­tor (com­monly called the fuel sur­charge), for­mu­las for which are out­lined in var­i­ous parts of the ESA and its re­lated sched­ules and reg­u­la­tions. Let’s look at the ba­sic func­tion of pro­vid­ing new cus­tomers with elec­tric­ity for ex­am­ple. You see, while LUCELEC pro­vides elec­tric­ity to cus­tomers, the company does not de­cide who can be given power. Any­one who has ap­plied for a new con­nec­tion will know such au­tho­riza­tion must come from the Min­istry of In­fra­struc­ture, Port Ser­vices and Trans­port specif­i­cally the of­fice of the Chief Elec­tri­cal In­spec­tor, who must cer­tify that the elec­tri­cal wiring in the struc­ture to be con­nected meets the re­quired stan­dards for safety. That Min­istry is also re­spon­si­ble for the street light­ing pro­gramme, de­ter­min­ing where street lights should be placed. LUCELEC fa­cil­i­tates their in­stal­ment and main­te­nance and cov­ers the costs of th­ese ser­vices while the Gov­ern­ment pays for the con­sump­tion. Th­ese ar­range­ments are also de­fined in the ESA. The Min­istry of In­fra­struc­ture is one of two Min­istries with im­me­di­ate Gov­ern­ment over­sight over LUCELEC. The sec­ond is the Min­istry of Sus­tain­able De­vel­op­ment, En­ergy, Sci­ence and Tech­nol­ogy. Part 4 Sec­tion 32 of the ESA man­dates the company to sub­mit an­nual au­dited ac­counts to its Min­is­ters thereby en­sur­ing that an in­de­pen­dent source will pro­vide Gov­ern­ment with a clear pic­ture of its op­er­a­tions. The ESA also makes pro­vi­sions for a Cer­ti­fi­ca­tion Com­mit­tee (Part 4 Sec­tion 37) and Re­view Board (Part 4 Sec­tion 38) to set bench­marks for LUCELEC to achieve in relation to var­i­ous op­er­at­ing stan­dards and to re­view tar­iffs re­spec­tively, in ef­fect ful­fill­ing two known func­tions of a reg­u­la­tory body. Both en­ti­ties are made up of three per­sons, one ap­pointed by the Min­is­ter, another by the company and a Chair­per­son as agreed by both Gov­ern­ment and Company. The Cer­ti­fi­ca­tion Com­mit­tee sits for a term of two years and the Re­view Com­mit­tee for five. Th­ese Com­mit­tees are ap­pointed at the in­stance of the Min­is­ter. In ad­di­tion to com­ply­ing with the ESA, LUCELEC has also im­posed its own stan­dards of ser­vice in a Cus­tomer Ser­vice Char­ter it has made avail­able to cus­tomers. The Char­ter out­lines the stan­dards the company prom­ises to meet in pro­vid­ing its ser­vices to cus­tomers. In many in­stances th­ese stan­dards the company has im­posed on it­self are bet­ter or more strin­gent than stan­dards reg­u­la­tors have set for other util­i­ties in the re­gion. As wide rang­ing as the ESA is, it has not kept up with the pace of change in the op­er­at­ing en­vi­ron­ment and tech­nol­ogy, as is of­ten the case with leg­is­la­tion. There are ar­eas where im­prove­ments can be made in the over­all reg­u­la­tion of the elec­tric­ity sec­tor, in­clud­ing en­sur­ing that the ar­range­ments for such reg­u­la­tion are more clearly de­fined.

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