OECS Secretariat, Castries, Saint. Lucia March 19th, 2009: Experts in the OECS Energy Sector have been advised to keep on the front burner a possible return of the spiraling cost of fuel. The signal comes the Washington based World Bank who addressed a meeting of stakeholders in the OECS energy sector on Monday in Saint Lucia. 

Pierre Audinet, a senior energy economist at the World Bank used the forecast to emphasize his orgainsation’s support for the establishment of a regional institution proposed as the Eastern Caribbean Energy Planning and Regulation Authority or ECEPRA. The World Bank is of the view that such a collective approach can help reduce the impact of the unstable global energy landscape: “The world where we were back in July which had these completely nonsensical oil prices which really hurt you very badly and many other countries in the world was not just a one off episode. 

 

The likelihood that this comes back in spikes or for longer periods is actually quite strong. I would be very pretentious to say how much the oil price would be in the next few months but at least we are definitely going to see some amount of increases and stronger volatility. So we do believe in strong regulation of the electricity industry as a way to make sure that the costs don’t go too high and are properly optimized in prices. We believe that regionalizing the sector will make the issue of tariffs more transparent. The institution will advise on tariffs or in fact set the electricity tariffs, which is a major issue in the Eastern Caribbean.”

The World Bank believes a regional energy regulation authority will improve public confidence as well as attract increased investment in the sector. Audinet added that it could help reduce the growth of electricity prices.World Bank specialists have urged OECS Member Countries to pursue steadfastly its commitment towards establishing a regional energy regulation authority. In relation to the World Bank’s call, an OECS Secretariat review also recommends a combined approach by member countries to monitor and stimulate investments in the region’s energy sector. Dr. James Fletcher, the Director of Social and Sustainable Development at the OECS Secretariat noted that there is currently no structured energy management plan or policy in the OECS: “That study, which was conducted by the consulting firm of Castalia, benchmarked the performances of the electricity sector and assessed the feasibility of setting up a regional institution to help Governments improve the sector’s performance. The study concluded positively towards the value and the feasibility of creating an institution that would pool resources at the regional level to monitor and regulate the electricity sector and stimulate investments in the sector. This regional institution is viewed by a large majority of the electricity stakeholders as a key institutional reinforcement to enable each country to better implement its policy goals of energy diversification, competitiveness of the electricity supply industry and energy security.”

The energy sector stakeholders held follow up talks on Monday towards a final document on a regional energy regulation authority. This follows a call by OECS Heads of Government for the OECS Secretariat to consider a clear and strategic energy policy as part of a stabilization, stimulation and transformation package for OECS Economies. Keith Nichols, who heads the OECS Environment and Sustainable Development Unit OECS ESDU chaired Monday’s stakeholder dialogue. He says the group endorsed about 90 percent of a document which is to be presented to the OECS Authority for further instruction. Nichols noted that an adjustment to the proposed name of the authority, as well as its base of operations, was among the recommended changes in the document. Nichols concluded that dialogue will continue among stakeholders in the OECS Energy Sector as they move towards a collective regulatory mechanism through the establishment of such an authority.