Fuel Costs Dim DOMLEC
DOMLEC makes loss of EC$60,000.Pays $34 million more in 2022 for fuel
In 2022, Dominica Electricity Services (DOMLEC) made a loss because the cost of fuel went sky-high.
In its latest annual report, DOMLEC says it lost EC$60,000, and the electricity generating and distribution company says it spent $34 million more on fuel than it spent one year earlier.
"While we are saying goodbye to COVID-19, we saw the effects of the war in Ukraine, more specifically its impact on the price of oil and its effects on global economies," wrote DOMLEC's chairman Patrick Pemberton in the report. "DOMLECS fuel costs in 2021 was $38.35 million compared to 2022 expenditure of $59.02 million, which is $20.67 million, or 53.9% higher".
Pemberton said "We do not pass on the full increase" of the fuel costs to customers and acknowledges "the statutory interventions by the Government which helped curtail the rise in electricity prices".
In 2021, the Government of Dominica became the majority shareholder of DOMLEC when it bought 52% of the company's shares from Emera Caribbean Inc. (ECI) for US$5.0 million or EC$13.5 million.
DOMLEC's other shareholders are the Dominica Social Security (20%) and private investors (28%).
"The acquisition aligns Government's policy objectives with the strategic goals of the company to build resilience in the energy sector through deliberate action to improve energy security," said Pemberton. "The common aim is to enhance the integrated system for the generation, transmission and distribution of affordable and sustainable energy and safeguard the power system against climate change impacts."
Over its 74-year history, DOMLEC has changed hands several times, and the Government of Dominica has held majority shares at least twice.
Started in 1949 by the Colonial Development Corporation, the company in 1976 was purchased by the Government (49% of the shares). In 1983, the Government acquired the remaining shares. In 1987, Government reduced its ownership interest in the company by offering 60% of the shares to the general public and DOMLEC's employees.
On 23 March 1997, the Commonwealth Development Corporation (CDC) purchased 72.8% of the shares from the Government, thus making CDC the majority shareholder.
In May 2004, WRB Enterprises and Dominica Social Security purchased CDC's shares in DOMLEC in a collaborative effort. As a result, these companies bought 52.8% and 20% of the shares, respectively.
In April 2013, Light and Power Holdings (a subsidiary of Emera Corporation) bought WRB Enterprises' shares. As a result, they became the majority shareholder of the company.
Resilient Power System Wanted
After Hurricane Maria in 2017, DOMLEC suffered a net loss of $9.35 million after tax. It was estimated that it would have cost the company EC$ 31,799,028 (US$ 11,704,158) to restore the damage.
That is why Pemberton said in the 2022 report, "Securing a resilient power system will require significant investment to mitigate risks, minimize damage to infrastructure and avoid disruptions of service".
He added: "Moreover, the island's exposure to climate hazards, the adverse effects of global events on energy and commodity prices, can potentially impact the timeline to meet the ultimate goal for energy independence. In 2022, the latter was a particular challenge for the company".
As in previous reports, in the 2022 document Pemberton reiterated, "DOMLEC will continue to explore all available sources of renewable energy with a view to reducing dependence on fossil fuel and the attendant volatility in the pricing of electricity".
Pemberton added: "With the geothermal plant to be constructed by the GoCD hopefully to be commissioned sometime in 2024, we are excited about the future that will include this readily available and more cost-effective, renewable energy option, along with solar generation and the complete utilization of our hydroelectric plant, as the PADU plant was recommissioned in December 2022".
From the statistics presented in the report of 2022, DOMLEC said energy sold reduced by -03%, and the number of customers increased to 37,000 from 35,702 in 2021.
CORRECTION OF OUR PRINT VERSION OF THIS STORY:
The actual DOMLEC loss for 2022 was EC$60,000, not $600,000, as we stated in the 23 May 2023 issue of the Sun.
In addition, DOMLEC says it DOES not "pass on the full increase of fuel increase to our valued customers". We stated in our story: Pemberton said DOMLEC DID not pass on the higher fuel costs to customers….