OUR head bats for multilayered disaster risk framework for utility sector

As the transatlantic hurricane season approaches, Ansord Hewitt, director general at the Office of Utilities Regulation (OUR), is calling for a multilayered disaster risk framework for the utility sector to ensure access to funding and provide a critical safety net in the aftermath of any adverse event.

Speaking recently at the OUR’s annual director general’s stakeholders’ engagement, Hewitt pointed to Jamaica’s comprehensive disaster risk financing structure, which includes a contingency fund, parametric insurance, catastrophe bonds, and contingent credit facilities, and allowed the island to access liquidity of up to US$6.7 billion after Hurricane Melissa.

“When we consider the enormous price tag attached to repairing badly damaged utility infrastructure, replacement of equipment and supplies and other resources needed and the difficulty in sourcing adequate funding, we should seriously consider a similar approach of having a multilayered disaster risk framework for the utility sector,” Hewitt said.

Stating that sustainable financing mechanisms are at the heart of timely recovery, he noted that consideration should be given to the availability of and access to adequate funding facilities, whether locally or internationally, and the loss of revenues by utilities because of widespread and prolonged service outage.

The loss of revenue by businesses and residential consumers that cannot operate due to a lack of utilities, the impact on rate designs, which may cause adjustment to customer bills, and the trade-off between cost and building resilience into our network utilities are also key factors.

“To this end, the OUR supports public-private partnerships, resilient infrastructure development, exploration of resilience funds, and concessional permit financing and incentivising private investment in renewable energy and storage to reduce long-term system vulnerability,” he said.

He outlined actions taken by the OUR ahead of and in the immediate aftermath of the Category 5 storm, which caused approximately US$12.2 billion in damage to Jamaica.

Hewitt noted these actions included the approval of a withdrawal totalling US$40.7 million from the Electricity Disaster Fund to aid in faster recovery efforts by the Jamaica Public Service Company. It also approved $2 billion from the K-factor Fund for the National Water Commission (NWC) to finance post-hurricane restoration and the suspension of deposit to the fund for a period of six months, effective December 2025, resulting in total relief of $5 billion to the NWC.

GRANTED APPROVAL

Approval was also granted to the telecommunications sector for the temporary deployment of satellite connectivity for use by the Office of Disaster Preparedness and Emergency Management.

Hewitt further stated that attention should also be given to how global events increasingly shape local utility outcomes.

He pointed to the rising oil prices caused by the tensions in the Middle East, which he said reinforced the importance of renewables, energy efficiency, and regulatory foresight.

“For Jamaica, an oil-importing country, this means upward pressure on electricity-generation costs, potential increases in transportation and production expenses, and greater urgency to diversify our energy mix and strengthen energy security,” he said.

Additionally, Hewitt urged the development of mandatory resident standards for crucial utility infrastructure, accelerated investment in smart grids and strategic undergrounding, expansion of renewable energy and storage supported by regulatory certainty, and the establishment of a dedicated national residence investment framework.

He also called for ongoing structured post-event reviews to embed lessons learned into regulation and practices, and deeper collaboration across government utilities, academia and communities.

“Resilience is not built in moments of crisis. It is built before, tested during, and strengthened after. The OUR remains committed to being a forward-thinking, responsive, and principled regulator, one that protects consumers, challenges utilities to do better, and supports national development in an era of uncertainty,” he said.

sashana.small@gleanerjm.com