Developing a Roadmap for Effective Regulation of the Caribbean Energy Sector
Electricity prices in the Caribbean are among the highest in the world due to the dominance of small-scale electric systems, reliance on fossil fuels, and the lack of regulatory oversight. At a regulatory forum sponsored by the World Bank, Janine Migden-Ostrander identified two primary methods for addressing these concerns, namely stronger and more effective regulatory oversight and resource diversification leveraging integrated resource planning (IRP) to identify least-cost solutions. An effective power sector regulator establishes clear roles, responsibilities, and accountability, while promoting high standards of fair, transparent, and efficient processes. With this framework in place, the regulator has the tools to implement the sound, least-cost IRP options Ms. Migden-Ostrander describes in detail, including energy efficiency and customer-side resources. Properly implemented, these mechanisms ensure robust reliability and service quality for consumers. By looking at the system as whole across the Caribbean islands, strategic planning under an effective regulatory authority can help achieve public policy goals of less volatile electricity rates, energy independence, and fewer emissions, while creating jobs and energy security. At the same time, implementing decoupling and performance-based regulation can provide incentives for the utilities to create greater efficiencies.