Voicing their displeasure with the regulatory body, lawmakers nearly voted against $1.3 million in supplementary spending towards the Utilities Regulation and Competition Office during Friday’s Finance Committee hearing.
The vote was over whether the Utilities Regulation and Competition Office (OfReg) should receive an additional $1.3 million to fund its fuels-regulation operations, which include safety inspections and market analysis.
OfReg Acting CEO Duke Monroe explained that this funding is needed because his office does not generate any revenue from the fuels sector. OfReg has looked to introduce a “registration fee” regime in the fuels sector, but that has not been implemented. Premier Alden McLauglin added that the fuel-regulation operations will continue to be funded by government because OfReg does not want to add taxes to the fuels sector, which would increase prices for consumers.
The supplemental appropriation nearly failed. The vote was split – with seven in favour and seven against the funding – until Finance Committee chair Roy McTaggart voted in favour of the spending to break the tie.
Before the vote, multiple legislators voiced their displeasure that OfReg has cost millions of dollars while failing to control the price of fuel.
Opposition Leader Ezzard Miller pointed out that OfReg has recently launched a study to see what colours the territory’s fuel pumps should be. He questioned why the $1.3 million appropriation is going towards studies like this.
“Why are we spending money through OfReg to identify on the gas pumps what is a 50- or what is an 80-percent fuel octane?” Miller asked.
Monroe responded that his office has received complaints of misfuelling, where customers pick up the wrong nozzle and pump the incorrect type of fuel into their vehicles. Sol Petroleum has different coloured nozzles on its regular, premium and diesel fuels than Rubis and Refuel, Monroe explained.
This can sometimes confuse customers, according to OfReg. The outcome of OfReg’s study will include clear labelling requirements for the type and grade of fuel available, standardised colour coding of dispensing hoses to denote types and grade of fuel, and standardised nozzle sizing by type of fuel.
“What is the cost of this study to determine what colours the nozzles should be?” Miller asked, to which the premier replied that there is no specific cost attached to the work.
Miller further questioned why work on this is being conducted when OfReg is not controlling the price of fuel.
Monroe responded that OfReg’s strategy towards fuel costs is letting market competition determine the prices, but multiple legislators criticised that strategy, saying it has not worked.
“If we’re paying for something with the objective of lowering costs, and the costs aren’t going down, it means in essence that we’re paying for nothing,” MLA Chris Saunders said. “The real question, then, is: What’s the use? At this point, we should look at closing it down – barring the quality inspections.”
East End MLA Arden McLean made similar statements about shutting down some of OfReg’s operations.
“When authorities deliberately abuse their ministers and give them poor advice, it is time to shut them down,” he said. “It would be like the attorney general giving me bad advice because I don’t know anything about law.”
Premier Alden McLaughlin admitted that OfReg has experienced “teething issues” since being consolidated from the territory’s legacy regulators in January 2017. OfReg ran a nearly $1.5 million operating deficit in 2017, and has spent millions of dollars on travel expenses and consultancy fees.
However, the premier said OfReg’s new CEO should be coming on board “shortly”. The new CEO should be given a chance to assess OfReg’s operations him- or herself before the regulator completely changes its strategy towards the fuels sector, he said.
McLaughlin, McTaggart, Barbara Conolly, Joey Hew, Juliana O’Connor-Connolly, Tara Rivers, Dwayne Seymour and David Wight voted in favour of the OfReg appropriation.
McLean, Miller, Saunders, Bernie Bush, Alva Suckoo, Kenneth Bryan and Anthony Eden voted against it.