Approval Of Funding By CDKN For Amendments To Electricity Laws To Allow For Integration Of Renewable Energy Technologies

Press Statement by Minister with responsibility for Energy, Hon Evan Gumbs

As Minister with responsibility for electricity I am pleased to announce that the Climate and Development Knowledge Network (CDKN) – a UK based development funding agency – has agreed to fund a consultancy to recommend amendments to Anguilla’s electricity legislation to allow for integration of renewable energy technologies into Anguilla’s electricity profile.

You will recall my press release of 12th May 2011 in which I spoke comprehensively on the subject of the constant fuel surcharge increases and their impact on high electricity prices.

The press release alluded to the fact that my Ministry is undertaking a holistic approach to this problem, and outlined three broad phases, which when completed, which will result in a more long term and sustainable solution to this matter. However, its full impact of more realistic and affordable electricity rates will take some time to fully implement.

In correspondence received from CDKN on Monday 24th October 2011, CDKN has confirmed they are pleased to partner with the Government of Anguilla to begin work on the review of the electricity legislative framework to allow for the introduction of Renewable Energy technologies into the energy mix of Anguilla. This will set the stage for the broad-based development of Renewable Energy in Anguilla, which will in turn, set the stage for addressing the broader and deeper challenges of achieving energy efficiencies in all energy sectors and reducing the reliance on conventional energy sources, which is at the very core of the high energy prices in Anguilla. Our exclusive reliance on conventional energy sources, ie., fossil fuels such as diesel, is the primary reason for the high prices we pay for electricity.

If our dependence on diesel fuel can be reduced then we should see a correspondent decrease in the price of electricity. It must be remembered that Anguilla has no control over the price of diesel fuel on the world market and thus has no control over the imported price of the product. It would therefore follow that to a large extent, at least in as far as the international market impacts the price of diesel fuel, we here in Anguilla have no control over the price we pay for electricity, unless and until we reduce our reliance on diesel fuel.

Concurrently, the Ministry is also seeking funding to undertake a full independent tariff review to assess the full impact of the electricity tariff and fuel surcharge mechanism on the electricity sector. The outcome of this independent study will result in a restructuring of the tariff and fuel surcharge mechanisms.

When these initiatives are fully put into effect, Government will then transfer the governance and regulatory functions of ANGLEC to the Public Utilities Commission where the interests of the public, electricity producers like ANGLEC, other independent producers and the government would be better served.

This set of initiatives, when fully implemented, ought to in the medium to long term bring about a reduction in the price of electricity. Their long-term success will be truly realized when the efficient use of energy becomes a habit throughout Anguilla.

Again I would like to re-emphasize and remind the public that ‘public policy’ takes time to formulate and implement and thus the need for patience as Government works toward its objective of less reliance on fossil fuels. Consequently, my Ministry and the Government collectively are addressing this matter in a holistic manner which will involve a long term vision and strategy for the entire energy sector.  This long term vision encompasses several steps:

1. undertake an independent tariff review to assess the full impact of the fuel surcharge and electricity tariff on the electricity sector. This should result in the restructuring of the tariff and the fuel surcharge mechanisms;
2. undertake a comprehensive review of the electricity legislative framework – to assess its relevance in today’s environment where renewable energy is taking on a greater role and importance in the energy sector – and make amendments as appropriate; and
3. review the current governance and regulatory frameworks of the utility. The indications are that interests of the public, ANGLEC and Government will be better served if the utility’s governance and regulatory structure is located under the Public Utilities Commission.

In a nutshell this is the holistic approach that the Ministry is pursuing to the challenges of the electricity sector. This will in the long run provide relief and a more stable and satisfactory environment for all. The Ministry’s main drive is to implement policies, a tariff structure, legislation and, a regulatory and governance framework for the electricity sector that balances the interests of consumers, current and future electricity producers and distributors, shareholders and government.

CDKN is a low-carbon development and climate change focused organization and thus is covering aspects of Government’s work specifically related to climate change and renewable
energy integration. Government is therefore seeking funding from other sources to cover the other aspects of the work. It must be realized that in order to be effective all aspects of the work must be completed.

If funding is found, Government envisages the independent tariff study and legislative change work to take about 12 to 18 months; with the changes to the regulatory and governance frameworks taking an additional 6 to 12 months to complete.

Government would like to acknowledge the contributions of: the Anguilla Renewable Energy Office (AREO) and especially Ms. Beth Barry and Mr. David Carty; ANGLEC, in particular the General Manager, Mr. Thomas Hodge; the Attorney General’s Chambers and; the Department of Environment to this initiative. I would also like to thank CDKN for helping to address an important priority of the Government of Anguilla by partnering with us.