Ministerial Statement by the Minister of Economic Development, The Hon. Dr. E. Grant Gibbons, JP, MP
Mr. Speaker, I am pleased to introduce the Government Fees Amendment (No. 2) Regulations 2017, pertaining to the electricity sector in accordance with the Electricity Act 2016 (“the Act”).
Mr. Speaker, these Regulations provide for relevant government authorization fees to be collected from the electricity sector as recommended by the Regulatory Authority (“the RA”).
Mr. Speaker, the Electricity Act establishes three main types of licenses, namely Transmission, Distribution and Retail (TD&R), Bulk Generation, and Self-Supply. Each type of licensee will be required to pay the appropriate fee to the Regulatory Authority as well as a Government Authorization Fee. This is similar to the fee structure in the telecommunications sector.
The TD&R licensee is the incumbent utility and this license specifically pertains to the grid infrastructure and the retail portion that delivers electricity to the end users.
The Bulk Generation license category has several sub-categories depending on the size and type of generation. Presently there is only one large utility-scale generation facility greater than 25 megawatts in installed capacity and that is the Belco generating plant.
Mr. Speaker, Bulk Generation facilities smaller than 25 megawatts, but larger than half a megawatt, will apply to large commercial operators who supply the Belco grid. The Ministry is not aware of any entity in this category at the moment but is aware of projects on the horizon for which this may apply. Bulk generation facilities of this scale that use renewable technologies will also have to pay a fee. Waste-to-Energy is the other sub-category of Bulk Generation, and this applies to the Tynes Bay facility.
Mr. Speaker, the Transmission, Distribution and Retail (TD&R) licensee will pay $0.2 per megawatt-hour sold, which for a projected 590,000 megawatt-hours will work out to approximately $118,000 per annum which will be assessed quarterly and paid in arrears. A Bulk Generation licensee with capacity of more than 25 MW will pay an authorization fee of $485 per megawatt per annum, which will work out to approximately $80,000 per annum for the incumbent utility
Mr. Speaker, a Bulk Generation licensee using fossil fuel to power their generators with capacity of more than half a megawatt and up to 25 MW will pay $800 per megawatt of installed capacity. Tynes Bay will not pay a government authorization fee at the moment as it is a Government asset and is already authorized to operate.
Bulk Generation licensees which generate electricity using renewable energy and are larger than half a megawatt of installed capacity and up to 25 megawatts, will pay $800 per megawatt per annum.
In this regard, it is anticipated that the solar photovoltaic facility at the L.F. Wade International Airport on the Finger will pay $4,800 per annum. It is important to note that residential and other smaller-scale photovoltaic installations will not fall into this category, and will therefore have no authorization fees to pay.
Mr. Speaker, these fees will come into effect on April 1st 2017 but may only be collected after licenses are issued by the RA, and this is anticipated to occur within the second quarter of the fiscal year 2017/18. The Regulatory Authority will be responsible for collecting these fees on behalf of Government, in accordance with Section 52(8) of the Regulatory Authority Act 2011.
Mr. Speaker, this concludes my remarks to this Honourable House on the proposed Regulations.
Thank you Mr. Speaker.