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Government says it changed OUR Act to avoid legal challenge

Published:Thursday | October 29, 2015 | 10:32 PM

The Office of the Prime Minister (OPM) has disclosed that it was forced to establish a new governance framework for the Office of Utilities Regulation (OUR) to stave off a possible legal challenge before the International Centre for Settlement of Investment Disputes (ICSID).

The OUR (Amendment) Act was passed in the House of Representatives on October 13 and in The Senate, last Friday.

However, the OUR has argued that the changes could undermine its independence.

 

Debbie-Ann Wright has more in this report

Minister with Responsibility for Information, Senator Sandrea Folconer says the changes arose out of concerns by investors about a perceived lack of objectivity in the OUR’s governance and decision-making.

She says as a result of these concerns and the threat of a legal challenge, a best practice examination of the legal and regulatory framework of the OUR was carried out.

Falconer says the World Bank helped to conduct this Electricity Licence and Regulatory Best Practices Framework Study.

Falconer says it was decided to expedite implementation of the recommendations of the World Bank study to reduce any likelihood of a successful claim being filed before ICSID.

She says the move was also aimed at ensuring the feasibility of the immediate development of new efficient baseload generating capacity, including the diversification of fuel.

This morning, energy minister Phillip Paulwell confirmed to The Gleaner/Power 106 News Centre that it was the Jamaica Public service Company Limited (JPS) which had threatened to take the government before the international body for settling investment disputes.

Earlier this year, the JPS said certain rulings by the OUR were threatening its financial viability.

Chief among the rulings was a directive by the OUR that the rates charged for electricity be reduced.

The JPS had been depending on receiving a rate increase to satisfy financial backers for construction of the Bogue Power Station in Montego Bay, St James.

Meanwhile, the Government is disputing claims by the OUR that it was not informed about the contents of the newly passed OUR (Amendment) Act.

The minister with responsibility for information Sandrea Falconer says a copy of the World Bank report was provided to all stakeholders, including the OUR, in June.

She says the OUR remains the only stakeholder that has not provided any written comments on the report.

Falconer also argues that the recent amendments do not in any way discourage or prevent further adjustment to the OUR Act as may be warranted in the near future.