UWP supports Governments purchase shares in DOMLEC but questions its energy policy

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MEDIA STATEMENT

Government’s acquisition of majority ownership of DOMLEC

The United Workers Party (UWP) welcomes the announcement by the Government of Dominica that it will use its majority shareholding in Dominica Electricity Services Ltd (DOMLEC) to lower utility bills, reduce the cost of doing business and create jobs while meeting the goal of 100% clean, carbon-neutral energy within the next eight years.

Based on the promises and pronouncements of the Dominica Labour Party (DLP) to the people of Dominica for more than two decades, this initiative is long overdue.

The DLP has spent the last 22 years criticizing the 1997 sale of the government’s 72 percent interest in DOMLEC to the British firm CDC for EC$21 million, part of a strategic plan to secure an efficient, resilient, low-cost energy supply service to the people of Dominica. CDC is the very same British firm that introduced electricity services to Dominica in 1949.

In September 2003, the DLP government angrily accused DOMLEC of:

  • “Engaging in public disputation and attempts to discredit Government both locally and abroad”;
  • “Communicating with the international community including the IMF, the European Investment Bank and the Caribbean Development Bank in an effort to further undermine and intimidate the people of this independent and sovereign state”;
  • “Unacceptable conduct that attempted to capitalize on our difficult national problems and made Government the victim of hostility and prejudice”.

Yet, notwithstanding “the desire of this DLP Government to regain ownership of DOMLEC”, less than one year later in May 2004, the DLP government allowed the US company WRB Enterprises to take a controlling interest in DOMLEC with 52 percent of the CDC shares while the other 21 percent was purchased by Dominica Social Security. In April 2013, the DLP government had another opportunity to acquire the majority shareholding in DOMLEC from WRB. Instead, it stood aside and looked as Emera INC moved in.

While Government has not disclosed the price paid for the 52 percent shareholding acquired from Emera, DOMLEC shares on the Eastern Caribbean Stock Exchange (ECSE) carried a price tag of EC$3.50 on March 31st, 2022 – the day of acquisition. At this price, the 10,417,328 issued shares of DOMLEC had a value of EC$36,460,648 meaning a sale price at the market value of EC$18,959,537 for 52% of the shares.

We trust that the share acquisition was executed by the ECSE and conducted in accordance with the securities legislation, good corporate governance practices, and ethical standards to prevent injury to minority shareholders, and protect the integrity of the market and the securities industry as a whole.

In this regard, we call for immediate disclosure of:

  1. The price paid to Emera for its 52% shareholding in DOMLEC
  2. The source of funds for the DOMLEC share purchase

With respect to achieving the goals of building resilience in the energy sector through deliberate action to improve energy security, and strengthen growth and economic prospects, we do not believe any of the stated promises will be realized in the absence of enlightened Government policy on:

a) the mix of renewable energy resources (solar, hydro, wind, geothermal) to be engaged;
b) the operation of an electricity power market in which DOMLEC no longer has a monopoly on generation;
c) government competing with itself through Dominica Geothermal Company and DOMLEC; and
d) private-sector competition for DOMLEC in an open power generation market in which per capita consumption is the lowest in the OECS with the highest unit price.