OfReg under fire after $2M cash injection

| 27/11/2018 | 51 Comments
Cayman News Service

Duke Munroe

(CNS): The premier has admitted that the office created to regulate utilities has encountered a number of teething problems and has needed much more money than anticipated since its creation some two years ago. Outlining the need for more than $2 million in additional appropriations for the Utility Regulation and Competition Office (OfReg), the premier told members of the Legislative Assembly that the office has not been in a position to collect regulatory fees because the regimes are not in place and have not yet reached cabinet for approval, and so the agency was short of operating funds.

As the opposition raised a catalog of concerns during Finance Committee on Friday, they said they could not see evidence of the office actually regulating anything, despite the major cash injections.

Duke Munroe, one of the acting chief executive operating officers at OfReg, said that “these things take time”, as he explained the broad and unique areas that the office is working on, but ultimately the office hopes to create a robust, sustainable competitive environment for the markets it manages, pushing prices for utilities down.

He said the office has been set back in the fuel and water sectors because of issues relating to funding, and noted that the regulation of these sectors goes beyond price. He explained that the fuel markets have not yet been defined and that research and market analysis has yet to be done.

Munroe revealed that after two years, the regulator has not yet worked out how it is going to regulate the fuel sector, in particular, in the absence of the market study, which he said was needed to inform the intervention. The premier also confirmed that his office, which oversees this new regulator through the Cabinet office, has still not received any advice about how to manage the issue relating to pump prices.

Cayman News Service

Gregg Anderson

Gregg Anderson, who is the acting CEO responsible for the regulation of water and electricity, also spelled out some of the problems relating to water. He said talks with the private water company, Consolidated Water, were ongoing because OfReg had rejected the company’s first offer on the potential price regime as it was not a good deal for consumers. He said the office was now considering a second offer.

Asked by the member for East End about alternative fuels like OTEC, the proposed offshore thermal energy plant, Anderson said that the proposed rate was too high. He noted that this technology has still not been proven in a commercial environment, and although OfReg has not ruled out the proposal, the “rates are not passing muster”. He said it could help drive down use of fossil fuels and reduce carbon emissions, but until a better rate was offered, it was unlikely to be a solution for local energy needs.

The members of the LA were not only deeply concerned about the failure of the agency to regulate the utilities and bring down any costs for utilities or fuel prices, especially at the pumps, but also the issues relating to the failure of the regulator to do anything about the extensive problems in the technology sector, especially the poor level of service for those in the outer districts.

Monroe told members that there had been breaches by ICT licence holders but he admitted no one had been fined for their failures to provide fibre service out to the eastern districts. He said that the regulator had decided to leverage the breaches going forward rather than fining them now, with the goal of holding them to account in future.

He also said that OfReg was working on setting up service quality standards regarding the internet and telephone service providers. Telecoms companies were going to be held to account for the internet speeds and quality of coverage to match the truth of what is being marketed, he said.

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Category: Business, Government Finance, Politics, Private Sector Oversight, utilities

Comments (51)

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  1. Anonymous says:

    “We know that external displays of dysfunction derive from internal disorder. In OfReg’s case, this was exhibited most unprofessionally during a meeting of the regulator’s Board of Directors, where Board Chairman Linford Pierson threatened physical violence against Deputy Chairman Ronnie Dunn, after Mr. Dunn claimed that Mr. Pierson may have broken the Anti-Corruption Law by attempting to secure a commitment from board members to support Mr. Pierson’s appointment as acting CEO of OfReg – the very entity he was appointed to oversee.”
    And you people seem to think that’s okay….

  2. Anonymous says:

    I’m on a gravy train with whiskey wheels!

  3. Anonymous says:

    A village size country with an exaggerated sense of importance and complete lack of wit on all levels of government. Disagree? Proof it by fixing your Dump. Remember my words, it will be the Dump that would bring the end to your prosperity. Just one outbreak of unknown disease or an uncontrollable fire, even an explosion, and life as you know it would be a history. The probability us high.

  4. Anonymous says:

    The explosions-waiting-to-happen that are Fuel Road Tank Wagons were supposed to be regulated, yet fleets of these have been imported and are now refueling boats/cars and trucks anywhere they want with impunity. Not only is there no safety awareness, spill containment, or cleanup gear – there are often Zoolanders smoking right beside the filling operation in progress.

  5. Anonymous says:

    Just another CCF- Cayman Cluster F&*k

  6. Anonymous says:

    Another Government department created to provide employment, for other than Caymanians.

  7. Accountability says:

    With CONFLICT OF INTEREST, friendship and brotherhood in the private utility companies, how can the GOVT and Ofreg be impartial and hold them accountable?

    The Auditor General was hired because of transparency and being neutral BUT They are all covering for each other.

    The people need to demand better prices and services by legal and democratic actions or call in the NCA to investigate.

    Certainly the GREAT JUDGE never sleeps or slumbers.

  8. Anonymous says:

    Regulating water, energy and telecommunications is hard, even for real countries, much less in a small town like Cayman. You dont have the expertise and it will cost a ton to hire it. That cost is going to overwhelm any savings. The water and telecom all operate under contracts or licenses. Just negotiate the best deal you can and then enforce it. Gasoline prices are beyond your control without antitrust laws, and antitrust is also beyond your expertise, so you may as well forget it. Offreg seems to think price controls are the answer. Good luck with that.

  9. Anonymous says:

    All we are getting from OfReg is a lot of talk and no actual results or answers. OfReg is top heavy and should be required to find the required funds by way of reductions in expenditures. The management team also needs to be given a deadline to produce some actual results that are in the interest of the consumers, failing which the entire management team should be removed and replaced.

    These inept and incompetent individuals and our inept and incompetent politicians need to stop treating the taxpayers of this country as an endless supply of money.

  10. LOL says:

    Ever hear the story about dog chasing its own tail… Grab some popcorn and enjoy the view.

  11. Anonymous says:

    The Board of Directors have a fiduciary responsibility to clean this up. Who are they and what is their annual stipend?

  12. Anonymous says:

    Something is far wrong with this agency. High paid people who really dont seem to have performed well in previous jobs plus a Board whose members receive outrageous remuneration compared to other boards and commissions doing equally important work. And what about the marl road stories about fancy vehicles having been bought for the bosses by the bosses? More expenditure by a statuary authority using tax payer funds to enrich themselves….like Maritime, Civil Aviation etc etc.Where is the Auditor General?

  13. MERVYN CUMBER says:

    I agree, with the comment that this Department is a waste of time and money. Market forces worldwide and here in Cayman will prevail. Can you seriously think you can tell Oil Companies what they should charge? Wake up, they could leave tomorrow! Further, both Cayman Water and the “Authority” depend on oil for their desalination!
    Think about it, Off/reg is usless!
    Mervyyn Cumber

  14. Ron Ebanks says:

    Someone asked the question , why do we need OFReg anyway ? We need OFReg the regulatory authority to do the job that a regulatory authority is suppose to be able to do . But if they don’t know how to do the job , they can’t do it because they don’t know how to , or some other reason why they aren’t .
    Have you ever seen a double dipping shark .???

  15. Ron Ebanks says:

    Seems like this government knows how to put these Boards in place , but don’t know how to make them work . Consumers don’t look for your utilities bills to drop down any time soon , but a rise is right around the corner . It almost sound like no one is concerned about the consumers .

  16. Jotnar says:

    “leverage the breaches going forward rather than fining them now, with the goal of holding them to account in future..”

    so ignore the immediate problem, on the promise that at some point in the future you may do something about? How the h%ll is that leverage? That’s rolling on your back and asking for your tummy to be tickled. Quite apart from not protecting the consumer now, any attempt to seek damages or compensation in future when you have publicly admitted you know of the breach and are not doing anything about it now massively undermines your legal position.

    What qualifications or experience do these regulators have, because it looks like they are incapable of doing anything – even the simplest of things – without advice. When i put my car in for a service I dont expect the garage to say that they were unable to check it without hiring a consultant – at my expense – to tell them how to do the very thing that they then intend to charge me for.

  17. Anonymous says:

    To paraphrase from this story. Referring to OTEC Anderson noted that this technology has still not been proven in a commercial environment. Comments that suggest that he might be the right man for the job because OTEC is ‘fool’s gold’ when it comes to sustainable energy. If he can see through this scam we should listen to him because if it gets the go-ahead a $2million hit will seem like a drop in the ocean.

  18. Anonymous says:

    anywhere else in the world there would be resignations and heads would roll…..but here… its just another day in the civil service/cig wonderland…..

  19. Anonymous says:

    can the auditor general investigate asap?

  20. Anonymous says:

    And the CIG gravy train rolls on and on, and on.

  21. Anonymous says:

    What percentage of the annual OfReg regulatory cost is recovered by way of real world fines and penalties? Other than the finger wag for Sol’s depot fire that might have leveled a district, have there been any other fines levied in the last five years?

    • Money for nothing & perks for free says:

      Goose egg, zero, nada! The circus continues with OfReg cronies playing right into the hands of CUC, mediocre telecom providers and the apathetic sewage & water utility/wannabe regulator. They’re salt, the lot of ‘me. Disband this redundant fiddling office now!

    • Anonymous says:

      ofreg will cost us more than the dock.

  22. Anonymous says:

    If there are words that inspire confidence in a 2 year old regulatory body they are these:

    “with the goal of holding them to account in future.”

    I literally cackled when reading this article

    The CIG cracks me up

  23. Anonymous says:

    what a joke. any fees that this board charges the utility companies will ultimately be reflected in our bills in some form.

  24. Anonymous says:

    asked before….
    how many ppm/ofreg members are masons?

    • Anonymous says:

      How many are qualified to do their job or even remotely competent? nepotism and cronyism are not dependent on Lodge membership – all you need is the ability to appoint people to high paid positions, and the pay off of them exercising their authority accordingly.

    • Anonymous says:

      Remember ICT rates are regulated so no

  25. Anonymous says:

    probably the finest example of ppm(lodge) ‘good governance.’…..
    ofreg is a bad joke that people are paying for ….

  26. Anonymous says:

    He said the office has been set back in the fuel and water sectors because of issues relating to funding, and noted that the regulation of these sectors goes beyond price. He explained that the fuel markets have not yet been defined and that research and market analysis has yet to be done.

    For $1 million, which appears to be the going rate for OfReg, I would be more than happy to do the research for them. About 99% of it could be covered by comments found here on CNS.

  27. Anonymous says:

    Another Alden disaster.

  28. land crab says:

    They have far more teething problems than the Government dental service. But let’s look at the bright side, all this additional emergency funding pales into insignificance compared with the tens of millions of dollars poured annually into Cayman Airways and there’s no end in sight to their spiralling losses.

  29. Anonymous says:

    hey greg…i going get plastic water container from brac and buy flowers bulk…it cheaper and i can regulate my own water usage….besides…if a pipe burst…i only wind up with a burn pressure pump and not a 25k or million dollar bill? they selling all sizes in brac…from 200 gals —3000…i contacted him yesterday…he a great guy…lives in cotyon tree bay…so caymanians…if you want find out..just call district admin in brac…they should know who is selling…

  30. Anonymous says:

    Anyone know what WORC’s budget is?

  31. tagcayman says:

    it is time to scrap the idea before it gets even more out of hand and go back to the drawing board. this has spiraled out of control.

  32. Anonymous says:

    lodge coffers need topping up! ? whats wrong with you all…dont you understand!?

  33. Anonymous says:

    Yeah, compass had provided details of consultancy expenses…surprised there is no uproar.. all seems to be well in the kingdom of Cayman.


    “…a “young professor determined to help people understand that high quality telecommunications connectivity is no longer considered a luxury, and that in several countries, is now considered a right.” YOU CAN’T MAKE THIS UP!!!!!!!!

  34. Anonymous says:

    Why do we need OfReg anyway? Government should spend the money on something that is more beneficial to the islands.

  35. Anonymous says:

    So they are not regulating anyone and they cannot collect fee..so pray tell what are they doing?

    While Nero fiddled, Rome burned…

    • Anonymous says:

      Captured this to the tee but I think you give them too much credit comparing them to Nero and Rome. It’s more akin to Papa Doc & Haiti.

  36. Anonymous says:

    Seems the increased taxes (regulatory fees) needed to fund Off Reg will eat up any consumer savings and ultimately cost the consumer more.

  37. Anonymous says:

    Another useless waste of taxpayer money thrown around freely to be spent globe trotting by a select few. So the question becomes, who watches the watchmen. CIG at it’s finest.

    • Cayguy says:

      Typical govt bureaucrats with the high inflated salaries with no real worth or justification for their position. after all, consultants had to train a bunch of them for jobs they were hired for??! tarred with the same brush


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