The National Utilities Regulatory Commission offers food for thought

I understand that Mr Truscott “Sookoo” Augustin, the former chairman of the National Water and Sewerage Commission (NWSC), was interviewed on TV concerning the water sector. It dawned on me then that the newly formed NURC may be moribund so soon after life was breathed into it. Or are its administrators too preoccupied with the funeral arrangements of NWSC that there’s no time left to inform the public of its existence?

Readers may be aware that NURC was established under the authority of Act No. 3 of 2016 with an effective date of 4th January, 2016. That commission is de facto an expansion of NWSC in that it has authority to regulate other utilities e.g. energy/electricity in addition to the water sector. I am of that view since Act No. 3 of 2016 (NURC) incorporates the legislation which created NWSC except for deletions/revocations listed in the schedule of Act no 3 of 2016.

Minister in charge of the NURC Stephenson King.

Minister in charge of the NURC Stephenson King.

It is also my opinion that NURC was brought into effect prematurely as the electricity supply amendment Act No. 2 of 2016 provides the following: 1) to allow NURC to assume certain responsibilities re the electricity sector; 2) to reconfirm Lucelec’s monopoly position on the generation of electricity from fossil fuel; and 3) to provide for the regulation and licensing of energy generation from renewable resources.

Despite the above there is no subsidiary legislation, e.g. regulations under NURC, for the issuance of licenses to persons/companies who generate electricity from renewable sources for supplying the public. Prior to the establishment of NURC those who were able to generate such energy were able to sell their excess to Lucelec. The company has ceased to entertain such transactions since it would be illegal to do so without the necessary procedures/legislations in place.

The undue haste in establishing NURC boggles the mind. Imagine an advertisement for a CEO being placed in the local media by the Ministry of Sustainable Development even before the Board of Commissioners was appointed—a remit of the latter.

Now that there is the NURC with additional staff—viz CEO, corporate secretary and an engineer—there is little that can be done with regard to regulating the energy sector. The irony of it all is that, in effect, NURC is overstaffed as it can only regulate the water sector which was already being done by NWSC staff. The situation is further exacerbated since the interaction which NWSC staff had with the public and media (e.g. community town hall meetings, press releases and interviews, etc) has apparently ceased. One wonders in what staff, who were trained at public expense, are currently engaged.

An anomaly has also arisen since the funding of staff, including additional, is from the levy and license fees collected from the water sector only. How long will this farce be allowed to continue? Another aspect of the NURC legislation which is of concern, and to which I drew attention previously, is the apparent conflict in having the same minister responsible for public utilities also overseeing the regulatory commission. This practice obtained previously in other regional states but has since been changed. It is frowned upon at the international level, as the following quotation from a report issued in August 2014 will show: “Improving economic regulation of urban water. Section 4.3.3 page 29 states the following: Given the water industry is government owned, there is a strong case that the economic regulator needs to be independent from government in order to avoid conflicts of interest as owners, policymaker and regulator.”

Additionally: “The economic regulator should be an independent body clearly at arms-length from government, should be governed under its own Act and report to a Minister not responsible for the sector they are regulating.”

I regret having to write this article but my aversion to wastage insists I do. The situation as at February 2016 did not call for the employment of additional personnel without the legislative authority to carry out the functions envisaged under NURC. The regulation and the relevant systems first had to be put in place.

Further, as a Commissioner of NWSC, I expressed my concern in late 2015 to the inadequacy of the transitional arrangements for moving from NWSC to NURC. It is instructive to note the NURC bill had provided for the act to come into force on a day to be fixed by the Minister by order in the Gazette. If that provision had been observed, it would have provided sufficient time for the preparatory work to be done, e.g. establishing regulation and systems to put into effect the requirements of the Act.

The author served for several years as Cabinet Secretary under Prime Minister John Compton.

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