The appointment of the Chairman and Commissioners of the Utility Regulatory Authority (URA), long overdue, will provide additional scrutiny to the decision making process of our public utility services.

The establishment of the URA enacted by Parliament 12 years ago suffered from a long gestation period with two amendments added to the original Act. The Chairman and Commissioners have good credentials and will no doubt execute their responsibility within the provisions of the Act. The Authority will add an extra layer of supervision in the analysis of projects. They will be guided by the prudential principles enshrined in the law, namely but not exclusively the following pertinent sections:

Section 5 (a) ‘ensure the sustainability and viability of the utility services’;

© ‘promote efficiency in both operations and capital in- vestments in respect of utility services’; and (d) ‘promote competition to prevent unfair and anticompetitive practices in the utility services industry’.

Section 6 (d) ‘regulate tariffs and other charges levied by a licensee in accordance with any rules specified in the relevant utility legislation’;

(k) ‘examine and make recommendations to a licensee in respect of any Power Purchase Agreement, which a licensee proposes to enter into’.

Most importantly, Section 7 which refers to:

‘Independence of Authority Subject to this Act, the Authority shall not in the exercise of its functions under this Act or utility legislation, be subject to the direction and control of any other person or authority.’

These unique powers vested in the Authority by Parliament should be exercised diligently and with discernment so as to protect the interests of consumers and the utilities.

Two issues that might have long term consequences for the CEB need to be addressed urgently. CEB will soon issue tenders for the design, supply, installation and commissioning of two Gas Turbine Units (each rated 35-40 MW) configured in open cycle mode. The document indicated that the Gas Turbines may be converted to a Combined Cycle Gas Turbine power plant in the future. For how long will these gas turbines operate in open cycle mode? What will be the cost per unit of electricity produced even using light diesel fuel? Will these Gas Turbines run for peak loads as is currently the case with the three Gas Turbines at Nicolay Power Station that operates at very low plant utilisation factor of 3 %?

The Combined Cycle operation of the Gas Turbines will fit the base load requirements of our system. This addition needs to be weighed against our existing base load assets at Fort George Power Station (120 MW) and the contractual base load supply from the IPPs (223 MW). Any improper assessment could end CEB with expensive stranded assets.

Power System Planning

The other concern relates to the current negotiations between Alteo Energy Ltd and the Ministry of Public Utilities relating to the renewal of the Purchase Power Agreement (PPA) between CEB and the company. The URA, as stipulated in Section 6 (k) of the Act, has to scrutinise the proposal of Alteo. The latter is offering a 2 X 45 MW capacity new thermal plant with more efficient high pressure boilers operating on bagasse/coal fuel mix; their existing system is producing 27 MW on bagasse/coal at FUEL station and 22 MW on coal at Beau Champ site. This new base load addition to the grid will perforce delay the installation of the more efficient Combined Cycle Gas turbine system (total capacity 105 – 120 MW); hence the proposal is only for the inefficient open cycle mode in the foreseeable future. The investment of CEB on these open cycle Gas Turbines must be weighed in economic and financial terms against the contractual obligations for the 2 X 45 MW base load plant of Alteo. This is mandatory under Section 5 © of the Act.

No doubt URA will have plenty on its plate to address the urgent development needs of the power sector. It must re-examine the methodologies and procedures for power system planning, allow the correct determination of the contributions of wind and solar plants to the supply of peak and semi base load demand, review the change in power and energy demand for the short and medium term due to reduced economic activities in the country and eventually reassess the need for the gas turbine system.

A decade after the defunct CT Power saga, would it not be judicious to request the World Bank to update their recent Power Sector report tabled last year in Parliament at the request of the Leader of the Opposition?