Minister On Electricity Amendment Act 2019

June 7, 2019 | 8 Comments

[Updated with PDF] Speaking in the House of Assembly today [June 7], Minister of Home Affairs Walter Roban said he will table a Bill entitled the ‘Electricity Amendment Act 2019.’

“Quite coincidentally, we were working on this amendment to the Electricity Act 2016 to assure the proper regulation of the electricity sector when the announcement was made that the Ascendant Group Ltd had identified a proposed buyer,” Minister Roban said.

Noting that the “sale cannot be finalised until the RA gives consent to a licence transfer,” the Minister said, “I must state upfront that I have every confidence that the RA will perform the due diligence required prior to making a decision on whether to approve the transfer of any licence.

“However, it is also important to note that if the RA approves a licence transfer without adhering to the Ministerial directions, the only remedy currently available to the Government is to appeal to the Supreme Court to grant an injunction to require the RA to comply with the directions. However, it would be too late to do so if a transfer had already been approved by the RA.

“I am sure that you agree that the better remedy is to provide the Minister with an opportunity to review the RA’s intended consent to the transfer of the licence to ensure that the application is in accordance with the Ministerial directions.

“The proper regulation of the electricity sector would be further strengthened by requiring that the RA’s consent shall not be given unless an IRP has been approved and published and that, when making its decision whether or not to consent to the transfer, the RA shall have due regard to the IRP.

“The BELCO plant is a strategic asset which is used by all residents in Bermuda. It is critical to our social and economic well-being. Therefore, it is the duty of this Government to ensure that any proposed sale will promote ‘economic efficiency and sustainability’ in order to reduce our reliance on fossil fuel, increase the use of renewables and make electricity more affordable for all residents.

The Minister’s full statement follows below:

Mr. Speaker, as the Order Paper indicates, I will today table a Bill in this Honourable House entitled the Electricity Amendment Act 2019.

Mr. Speaker, you will remember that on the 15th March 2019, I informed this Honourable House that, on learning that the Ascendant Group Ltd announced that it was considering the sale of the company, I issued Ministerial directions to the Regulatory Authority [RA] which are imbedded in the purposes of the Electricity Act 2016, namely, to seek—

  • [a] to ensure the adequacy, safety, sustainability and reliability of electricity supply in Bermuda so that Bermuda continues to be well positioned to compete in the international business and global tourism markets.
  • [b] to encourage electricity conservation and the efficient use of electricity;
  • [c] to promote the use of cleaner energy sources and technologies, including alternative energy sources and renewable energy sources;
  • [d] to provide sectoral participants and end-users with non-discriminatory interconnection to transmission and distribution systems. This prevents any monopoly on the generating subsector and ensures that other market participants are allowed to interconnect to the grid, and it ensures that end users are not denied service without just cause;
  • [e] to protect the interests of end-users with respect to prices and affordability, and the adequacy, reliability and quality of electricity services; and
  • [f] to promote economic efficiency and sustainability in the generation, transmission, distribution and sale of electricity. Economic efficiency in these areas translates to lower costs for customers.

Mr. Speaker, I also assured the general public that we would require any prospective new owners – and, indeed the current owners – to adhere to the soon-to-be-published Integrated Resource Plan [IRP].

Mr. Speaker, quite coincidentally, we were working on this amendment to the Electricity Act 2016 to assure the proper regulation of the electricity sector when the announcement was made that the Ascendant Group Ltd had identified a proposed buyer.

I would like to assure Honourable Members and the general public that the sale cannot be finalised until the RA gives consent to a licence transfer. This requirement is outlined in Section 30 [1] of the Electricity Act which states that: “A licence shall not be transferred or assigned without the prior consent of the Authority.”

Mr. Speaker, I must state upfront that I have every confidence that the RA will perform the due diligence required prior to making a decision on whether to approve the transfer of any licence.

However, it is also important to note that if the RA approves a licence transfer without adhering to the Ministerial directions, the only remedy currently available to the Government is to appeal to the Supreme Court to grant an injunction to require the RA to comply with the directions. However, it would be too late to do so if a transfer had already been approved by the RA.

Mr. Speaker, I am sure that you agree that the better remedy is to provide the Minister with an opportunity to review the RA’s intended consent to the transfer of the licence to ensure that the application is in accordance with the Ministerial directions.

The proper regulation of the electricity sector would be further strengthened by requiring that the RA’s consent shall not be given unless an IRP has been approved and published and that, when making its decision whether or not to consent to the transfer, the RA shall have due regard to the IRP.

Mr. Speaker, the BELCO plant is a strategic asset which is used by all residents in Bermuda. It is critical to our social and economic well-being.

Therefore, it is the duty of this Government to ensure that any proposed sale will promote “economic efficiency and sustainability” in order to reduce our reliance on fossil fuel, increase the use of renewables and make electricity more affordable for all residents.

Thank you Mr. Speaker

The Electricity Amendment Act 2019 follows below [PDF here]:

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Comments (8)

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  1. truthertz says:

    What is the point of having ‘independent’ authorities if the PLP are simply going to override their decisions?

    They screwed up the Gaming Commission and the prospects of a local gaming industry with a similar move.

    Why does the PLP believe that they know best? Their unbridled arrogance and intolerance of differing views/opinions is slowly killing this island.

  2. JohnnyB says:

    This is basically a safety statement to allow the minister to pick which side of the fence he is on based on public response once then RA approves the sale… Hilarious

  3. So the RA is just an arm of the Gvt? says:

    “I am sure that you agree that the better remedy is to provide the Minister with an opportunity to review the RA’s intended consent to the transfer of the licence to ensure that the application is in accordance with the Ministerial directions.

    So what is the point of the RA why not just have this as a function of Ministerial portfolio.

    This makes it look like the RA is a bit of a contrived oversight body.

  4. Joe Bloggs says:

    “The proper regulation of the electricity sector would be further strengthened by requiring that the RA’s consent shall not be given unless an IRP has been approved and published and that, when making its decision whether or not to consent to the transfer, the RA shall have due regard to the IRP.”

    That is all well and good going forward, but if it is to apply to the current situation it will amount to shifting the goal posts after the ball has been put in the net.

    “I am sure that you agree that the better remedy is to provide the Minister with an opportunity to review the RA’s intended consent to the transfer of the licence to ensure that the application is in accordance with the Ministerial directions.”

    And now the Minister wants a veto over the sale of a publicly traded company.

  5. Adklee says:

    Why would your Ministerial directions not align with the due diligence of the RA? You have every confidence in them and the people have little confidence in you. So let the RA steer the ship, and you steer clear of the whole thing. If it ain’t broke, keep the PLP away from it.

  6. Really says:

    The taxpayer supports the RA to a tune of over 6M a year to regulate telecoms and electricity. Ironically they have the ex leader of BELCO now the chief executive and commissioners appointed because if their supposed expertise. Surely they have the ability to make a decision?

    It’s also ironic the IRP needs to be finalized when it was supposed to be completed at the end last year based on the RA’s first public consultation. It was first issued to the RA in Feb 2018!

    Maybe what Bermuda needs is an efficiency review of the RA by the minister. Where and when will they do anything meaningful to impact the service, quality and price of telecoms and electricity in Bermuda.

    What is the return on investment for the cost we are spending? How much do we pay individual commissioners for the role? How are they appointed? How can the ex leader of BELCO be appointed only weeks after leaving BELCO yet commissioners can only be appointed after two years from leaving industry ?

    All very curious and concerning facts. The RA chief needs to be speaking to the Bermudian public at this critical time. He is hidden in the background. He needs to be more vocal and accountable during this major change in a Bermuda “strategic asset”.

    • Joe Bloggs says:

      How dare you question the RA! It was set up in 2011 to be an impartial body!

  7. Kathy says:

    Impartial body? Isn’t a former executive of BELCO now running the RA? Well done for stepping in Minister Roban and “fixing” the legislation that formerly omitted the Power of the Minister. This is in the best interest of the public that the Minister retains the power to reject something that is approved by the RA and not in the best interest of all Bermudians. The Power of the Minister is included in almost all Bermuda laws. Thank you also for forcing the IRP to be approved first prior to any sale!

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