Cayman’s electricity industry took a giant step forward on the path to introducing competition into electricity generation when the Electricity Regulatory Authority Law came into force on 12 April, says a press release from Government Information Services.
The new law provides for the possibility that the pre-existing licences of Caribbean Utilities Company and Cayman Brac Power & Light could remain in force until expiration. For CUC, that will be January 2011 and for Cayman Brac Power & Light December 2018.
However, Government has indicated that it hopes CUC will shortly resume talks, which lapsed as a result of Hurricane Ivan, on the possible issue of a new licence or licences under the terms of the ERA, the release said.
The law provides for a new body, the ERA, to govern the generation, transmission and distribution of electricity in the Cayman Islands; to grant licences to generate, transmit and distribute electricity; to provide for interconnection to transmission and distribution systems by licensees; and to amend certain provisions of the Electricity Law (2003 revision).
Generation of electricity from renewable resources, such as wind, solar power and ocean thermal exchange will be investigated and, where appropriate, encouraged by the ERA, the release said. Among new initiatives, the authority will place emphasis on ensuring that electricity licensees operate within the confines of strict environmental protection laws and regulations.
On the matter of the impact of this development on current pricing, the Government’s talks with CUC concluded in a Heads of Agreement signed by both parties in June 2004 which then was extended to September 2004 at which time both parties had almost finalised agreement on the terms to be included in any new licence to be issued to CUC.
These terms would have, amongst many issues agreed between CUC and the Cayman Islands Government, allowed for immediate price reduction in basic electricity rates on Grand Cayman, as well as the formation of the ERA.
However, CUC, having sustained considerable damage from Hurricane Ivan to its transmission, distribution systems and generation facilities, discontinued talks. The company had indicated in several media publications that discussions would resume at a ‘more appropriate time’ when all the costs associated with the damage caused by the hurricane were known.
While recognizing CUC’s position in the immediate aftermath of Hurricane Ivan, Government was disappointed that CUC has not resumed discussions on a matter ‘so important to the residents of Grand Cayman,’ the release said.
The ERA Bill was passed unanimously by the Legislative Assembly in March 2005.
‘Government sincerely hopes that CUC will return to the table to continue discussions regarding any new licence that may be issued them under the terms and conditions of the ERA Law 2005,’ said Juliana O’Connor-Connolly, Minister of Planning, Communications, District Administration and Information Technology.
The Governor in Cabinet also appointed the ERA board members.
The board includes Chairman, Cline Glidden Jr. and five directors: Rolston Anglin, Justin Bodden, Sheridan Brooks, Allan Roffey and the Permanent Secretary for the Ministry of Planning Communication, District Administration and Information Technology or Ministry designate. The Board will also include a Secretary, who will be the Managing Director of the Authority. The appointments are in effect until 31 March 2007.
The ERA’s new offices will be located in Alissta Towers on North Sound Way.