PM Mitchell’s Speech at the Launch of ECERA

PM Mitchell announced the new income tax threshold in a recent address to the nation





7 November 2013

Mr. Chairman

Her Excellency Dame Cecile La Grenade, Governor General

Dr. James Fletcher, Minister of Energy and Sustainable Development, St. Lucia

Cabinet Colleagues


Permanent Secretaries

Members of the Diplomatic Community

Dr. Len Ishmael, Director General, OECS Secretariat

Mr. Alessandro Legrottaglie, Senior Country Officer, World Bank

Rev. Emasseau Pierre, Grenada Conference of Churches

Mrs. Maxine Alexander Nestor, Project Manager, ECERA


Members of the Media

Brothers and Sisters of the OECS

This evening is a special evening in the life of our sub-region.


The launch of Eastern Caribbean Energy Regulatory Authority is about you and for you. It is about the future of our children and grandchildren.

Why so?  Energy is a development issue.

The development of the Caribbean requires that the supply of energy be reliable, accessible and affordable to all.

Consider the young student in a rural village in Grenada who needs to access the Internet to complete her School Based Assessment.  Without it, her future is compromised, destined to a life of poverty and limited opportunities.

Consider the farmer who needs to use a mobile phone to connect with a hotel to sell his produce.

Consider the investor who wants to establish an agro-processing plant in Grenada to create much needed jobs for our youth.

Consider our hotels which need air conditioning to keep their guests cool and comfortable.

What do they have in common?  They all need energy.  They all need electricity.

As far as the Government of Grenada is concerned, there are two fundamental objectives for Energy.  First, lower the prices of electricity.  Second, reduce Grenada’s carbon footprint.

I verily believe that these objectives are shared by St. Lucia and I daresay all members of the OECS.

Consequently, we have high expectations that the launch of ECERA will expedite our achievement of these fundamental objectives.


Our Energy Realities

It is a fact that the Caribbean has been slow to recover from the Great Recession relative to other developing regions of the world.  There are several reasons for this, including high debt, the collapse of BAICO and CLICO and lack of competitiveness.  However, many people lose sight of the fact that the high cost of energy is now a binding constraint on our region’s competitiveness and a major contributor to the high level of external debt.

Today, the price of electricity in the OECS is among the highest in the world.

In Grenada, it is EC$1.08 per kilowatt hour. In contrast, the cost of electricity in neighbouring Trinidad is 8 cents.

Last year, Grenada spent 10% of national income on oil imports.

Last year, Grenada spent $245.5 million on Energy Imports—which is 2.5 times Grenada’s earnings from Exports.

At present, renewable energy accounts for only 1% of Grenada’s electricity mix, which is solar PV.  The other 99% is imported diesel.

It is not unusual for Grenada to receive interest from investors in the areas of manufacturing.  After all, we have a beautiful country, friendly people, good skills, close proximity to the USA but there is a problem.  The cost of electricity is simply too high.

Very few manufacturers can open up businesses and create or sustain badly needed jobs with the current costs of energy.

These costs touch and concern all of us.  Households are feeling it. Hotels are feeling it. Manufacturers are feeling it.

Something must be done. Our New Economy demands action.

So what do we do?


The Future

We must change the operating environment.

Our region is well endowed with renewable energy resources (solar, wind, hydro and geothermal), yet we are using the generating technologies which utilize the most costly petroleum products.

This situation is unacceptable.

We must move with alacrity to diversify our energy supply; thereby forming a greater hedge against the impact of world oil prices volatility, thus achieving lower and stable input costs, and hence greater macroeconomic stability and competitiveness.

The Government of Grenada has prepared terms for a new operating environment for our Energy sector.

Allow me then to share how we see the future of the energy industry and especially electricity in Grenada.

1.      The Energy Mix in Grenada must see a steady expansion in the use of renewable energy technologies such as solar PV and wind.  For example, we must pursue the “greening” of our main public buildings. Ministerial Complex, Financial Complex and the Ministry of Education Complex.

Such a move will be consistent with the element of the New Economy which calls for promoting green technologies and lifestyles.

2.      There should be no exclusivity in any area of electricity generation.  The current monopoly which goes until 2073 is hurting innovation and renewable energy penetration.  An urgent amendment of the Electricity Supply Act is needed.

3.      Generation should be separated from Transmission and Distribution.

4.      All additional power capacity required by Grenada to ensure a reliable supply of electricity should be done via competitive auction or bidding.

5.      The savings from any new capacity won by GRENLEC should be passed on to the consumers.

6.      The Electricity Supply Act must be amended to provide for the Eastern Caribbean Energy Regulatory Authority as Grenada’s regulator.  In the interim, the Public Utilities Commission in Grenada must function to address some immediate issues in Energy sector. Once ECERA is established, the Commission must give way to ECERA.

7.      There must be allowance from small independent power producers to engage in renewable energy self-generation. The current policy of net billing does not encourage widespread use of renewables and must be modified.

8.      The regulatory framework for the supply of electricity must provide a reasonable period to recover the investment.  However, this period cannot be “forever,” as is the case with the current license for electricity generation, transmission and distribution in Grenada, which expires in 2073.

Tell me, how many of us will be around to celebrate that occasion in 2073?

We believe a period of 30 years is more than reasonable to cover an investment.


The Benefits

So we welcome the launch of ECERA, this evening.  We believe ECERA can make a fundamental difference in seven specific ways:

1.      It can improve the investment climate for incumbent energy providers and new investors in the industry by lowering the transaction costs of doing energy business in the OECS;

2.      It can help to inform energy policies and establish energy standards for renewables, generation and energy efficiency;

3.      As a strong independent regulator, it can fill the void that currently exists since there is no functioning regulator in Grenada;

4.      It can provide a fair mechanism for transparent fixing of rates for electricity;

5.      It can provide an effective mechanism to address consumer complaints

6.      It can lower the costs of regulation if an optimal number of countries (four or five) join ECERA.

7.      It can promote an integrated energy market such that a generator of wind energy can operate throughout the OECS as a single space with attendant economies of scale.

I wish to hail the partnership of the World Bank in the establishment of ECERA.  Your involvement signifies your understanding that energy is a development issue and very important for us in the Eastern Caribbean.

The role of the World Bank in helping our countries to liberalise the telecommunications industry just over a decade ago is one of the finest examples of the Bank’s positive development impact in the Caribbean and enduring legacy of our partnership.

Today, our people enjoy more choice; but more importantly, far lower prices because of appropriate competition in the telecommunications industry.

Back then, we heard voices of why it could not be done and untold adverse consequences.  A decade later those voices have been silenced by the reality of a more dynamic telecommunications sector.

The time is now right for us to proceed with the liberalization of the energy market with appropriate competition focused on our two fundamental objectives: lower electricity prices and lower carbon footprint.

We congratulate St. Lucia as our co-founding member for its vision and courage to proceed.

We encourage the other OECS countries to get on board quickly, thereby making this endeavor truly regional and beneficial to the people of the OECS.

I thank the ECERA Project management team led by Mrs. Maxine Alexander Nestor, for all your hard work, and I extend our best wishes for speedy implementation of this Project and the coming into being of the Eastern Caribbean Energy Regulatory Authority.

The people of the region are depending on us.

Let us go forward with resolve, and results.

I thank you.

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