Standards of Service for The Barbados Light & Power Company Ltd 2014 – 2017

• Jurisdiction: Barbados
• Judgment Date: 07 May 2014
• Docket Number: No: FTC/DECSOSB/2014-01
• Court: Fair Trading Commission (Barbados)

Standards of Service for The Barbados Light & Power Company Ltd. 2014 – 2017

No: FTC/DECSOSB/2014-01

Fair Trading Commission

DECISION

TABLE OF CONTENTS

SECTION 1 INTRODUCTION	4
1.0 Background	4
1.1 Public Consultation	5
1.2 Legislative Framework	5
SECTION 2 ELECTRICITY SECTOR	8
SECTION 3 ANALYSIS AND DETERMINATION	10
3.0 General	10
3.1 Summary of Outreach Responses	10
3.2 Changes to the Guaranteed Standards	10
3.3 Changes to Compensation	14
3.4 Changes to Overall Standards of Service	19
3.5 Changes to Exemptions	22
SECTION 4 DEFINITIONS AND SPECIFIC EXEMPTIONS	23
4.0 Definition and Specific Exemptions for Guaranteed Standards of Service	23
4.1 Definition and Specific Exemptions for Overall Standards of Service	27
SECTION 5 EXEMPTIONS	29
5.0 Changes to Monitoring and Enforcement of Standards	29
5.1 Other Exemptions and Conditions	29
SECTION 6 SYSTEM RELIABILITY INDICATORS	32
6.0 System Reliability Indicators	32
6.1 Power Quality Standard	33
6.2 Working Days	33

TABLE OF CONTENTS

SECTION 7 ADMINISTRATION	34
7.0 Monitoring and Enforcement of Standards	34
7.1 Public Disclosure of Information	35
7.2 Public Education	35
7.3 Implementation and Review	35

SECTION 1 INTRODUCTION

1.0 Background

1 This document sets out the Fair Trading Commission's (Commission) determination emanating from the review of the Barbados Light & Power Company Limited's (the BL&P) Standards of Service Decision dated February 22, 2010.

2 The Utilities Regulation Act, CAP. 282 (URA) provides for the Commission to determine standards of service for regulated utility companies. In discharging this responsibility the Commission issued a Consultation Paper on the Review of the Standards of Service for the Barbados Light & Power Company Limited as mandated by the Fair Trading Commission Act, CAP. 326B (FTCA). The Consultation Paper was issued on October 25, 2013.

3 The purpose of Standards of Service for electricity services is to ensure that a minimum quality of service is maintained, provide incentives for improvement, create conditions for customer satisfaction, monitor service quality and generally protect the interest of electricity users.

4 The Guaranteed Standards of Service require that the BL&P make a compensatory payment to each individual customer who is affected by its failure to meet the defined target for the relevant standard.

5 Overall Standards of Service are designed to reflect the general performance of the BL&P on an island-wide basis and are not defined by the service which an individual customer receives. There is no compensation to customers for failure to meet overall standards. However, the Commission has the power under Section 38(c) (i) of the URA to make orders to impose penalties where it is apparent that the BL&P has continuously failed to meet the required standards.

6 This Decision includes details of exemptions. Exemptions refer to situations where the Commission considers that failure to meet the standards is outside the control of the BL&P and thus removes its obligation to pay compensation for breaches of the standards.

1.1 Public Consultation

7 Service providers, representatives of consumer interest groups and other interested parties were invited to comment on the Consultation Paper. The consultation period commenced on October 25, 2013 and concluded on December 6, 2013. The only written comments received were from the BL&P.

8 The consultation also included an outreach exercise to inform and educate the public about the existing and proposed standards of service. Officers of the Commission interfaced with the public on a one-on-one basis in Bridgetown to obtain their views on the proposed amendments to the standards of service.

9 Having considered the data from the BL&P's Standards of Service reports from inception of the standards of service in 2006 to the present, ongoing customer comments and queries, public comments from the outreach exercise, the BL&P's response and discussions held with the BL&P, the Commission hereby sets out its determination on the review of the standards of service for the BL&P's, the primary entity responsible for generation, transmission and distribution of electricity in Barbados.

10 These revised standards of service shall be applicable from July 1 ^st, 2014 to March 31 ^st, 2017.

1.2 Legislative Framework

11 The functions of the Commission encompass the important aspect of setting of standards of service. Section 3(1) of the URA, sets out the functions of the Commission in relation to the service provider. Some of these functions are as follows:

• (a) to determine the standards of service applicable;

• (b) to monitor the standards of service supplied to ensure compliance; and

• (c) to carry out periodic reviews of the rates and principles for setting rates and standards of service.

12 The Commission therefore has responsibility for determining, monitoring and undertaking periodic reviews of the standards of service.

13 Section 4 of the URA notes that in determining standards of service the Commission shall have regard to:

• (a) the rates being charged by the service provider for supplying a utility service;

• (b) ensuring that consumers are provided with universal access to the service supplied by the service provider;

• (c) the national environmental policy; and

• (d) such other matters as the Commission may consider appropriate.

14 Before any standard of service can be determined the Commission, according to Section 4 (4) of the FTCA must consult with the service providers, representatives of consumer interest groups and other parties that have an interest in the matter before it.

15 The Commission may make orders imposing penalties for non-compliance with the relevant standards of service and prescribe amounts to be paid to consumers when a service provider fails to meet the standards. Section 38(c) of the URA provides that the Commission may make:

Orders with respect to

• i) imposing penalties for non-compliance with prescribed standards of service; and

• ii) prescribing amounts to be paid to the person referred to in Section 21 for failure to provide a utility service in accordance with the standards of service set by the Commission.

16 Rule 63 (2) of the Utilities Regulation (Procedural) Rules 2003, S.I. 2003 No. 104 indicates that service standards may include issues such as:-

• (a) Universality of service;

• (b) The provision of new services;

• (c) The extension of services to new customers;

• (d) The maximum response time permitted for responding to customer complaints and queries; and

• (e) Standards related to service quality which are specific to each sector.

SECTION 2 ELECTRICITY SECTOR

17 A number of new initiatives are taking place within the electricity sector almost simultaneously. These include the introduction of the Time-of-Use (TOU) tariff, the Interruptible Service Rider (ISR), and the Renewable Energy Rider (RER).

18 Briefly, the TOU tariff and the ISR, which were first introduced at the same time as the RER in 2010, continue to be classified as pilot programmes. The TOU offers participants the opportunity to shift their demand from peak demand periods to off-peak periods and thus benefit from a lower per kWh rate during off-peak hours. The ISR allows the BL&P to temporarily interrupt the electricity service of participating customers during conditions of high system demand and customers are compensated for such. Both programmes are Demand Side Management strategies. The Commission has granted an extension of the TOU tariff and the ISR Pilot Programmes under the existing terms and conditions until the end of September 2015 or the next rate hearing, whichever occurs sooner.

19 In addition, the BL&P is developing an Integrated Resources Plan (IRP) to guide sustainable development in the electricity sector by identifying the requisite investment that is necessary to meet the forecasted demand. Two pending studies will inform revisions of the IRP — An Intermittent Renewable Energy Penetration Study and a Demand Side Management Study. The Intermittent Renewable Energy Penetration Study will determine the maximum tolerable variable renewable energy capacity of the BL&P's transmission and distribution system, while the Demand Side Management study will examine strategies that may precipitate the efficient use of electricity by end-users.

20 The BL&P has already incorporated distributed renewable energy in the electricity system through the RER. The RER was designed specifically to facilitate the sale of excess electricity to the grid by customers using solar photovoltaic or wind renewable energy systems to offset electricity consumption from the grid, thereby enabling the development of distributed generation on the island. This initiative signalled the introduction of competition in the generation of electricity. The IRP further indicates that the BL&P plans to include utility scale renewable energy in its energy mix from its operation as well as from commercial Independent Power Producers (IPP).

21 The revised Electric Light and Power Act 2013 – 21, which now speaks to renewable energy development, was passed by Parliament in December 2013 and is awaiting proclamation. Among other things, this Act formalises competition in electricity generation by offering licences for renewable energy generation at utility scale.

SECTION 3 ANALYSIS AND DETERMINATION

3.0 General

22 The Commission considered all responses, analysed the data forthcoming from the BL&P, reviewed information that is publicly available on electricity standards of service, and compared...