After facing a nearly $1.5 million operating deficit in 2017, the Utility Regulation and Competition Office, known as OfReg, is pushing for a number of fee increases across the sectors it regulates.
According to OfReg’s 2017 annual report, which was tabled last month in the Legislative Assembly, the regulator intends to change the electricity sector’s fee structure to eliminate variability caused by the fluctuation in fuel prices.
This would have the effect of increasing the revenue received by OfReg from the electricity sector to about $1.2 million, the report states. OfReg received about $697,000 in fees from that sector last year. The report also states that OfReg intends to eliminate the $600,000 cap on a fee charged to telecommunication companies based on their revenues.
C3 owner Randy Merren said that to his knowledge, OfReg has not yet removed the fee cap – such a move would require the approval of Cabinet. If the cap is removed, it would likely only affect Flow and perhaps Digicel, he said. Those companies did not respond to requests for comment on how removing the cap would affect the amount of fees they are liable to pay.
Additionally, OfReg is looking to introduce a “registration fee” regime in the fuels sector, and regulatory fees in the water sector.
OfReg did not receive any regulatory fees from those sectors last year – a fact cited by OfReg officials as a reason for its operating deficit. In May, OfReg had to ask central government for a $1 million cash injection to address its budget shortfall.
At the time, OfReg Vice President Alee Fa’amoe told legislators that when OfReg was created last year, it was assumed at the time that OfReg’s budget would include funding provided via the territory’s water and fuel regulators. But that has not been sorted out, Mr. Fa’amoe said at a Public Accounts Committee meeting in May.
OfReg’s annual report makes similar statements.
“The fact is that insufficient consideration was given to the additional burden to [OfReg] imposed by the inclusion of the fuels market and the water sector regulatory functions,” the report states.
OfReg did not respond to requests for comment on the status of these revenue-raising initiatives.