PUBLIC Utilities Minister Marvin Gonzales said yesterday the Opposition is putting misinformation into the public through its interpretation of the Regulated Industries Commission (RIC) Act, by which the RIC receives its funding.
Gonzales was responding to assertions yesterday by Barataria/San Juan MP Saddam Hosein that the RIC’s independence could be questioned as it “collects millions” from electricity providers like the Trinidad and Tobago Electricity Commission (T&TEC).
At the United National Congress (UNC) Sunday media briefing, Hosein said the RIC was funded by the Government and collected $30.3 million between 2020 and 2022.
Hosein maintained the UNC’s position that the RIC was carrying out a Government agenda and that its proposed rate increases had been pre-determined, with the ongoing public consultations being a farce.
In a statement, issued in response to questions from the Express, following the UNC’s briefing, Gonzales said while the Opposition was “for the most part factual”, its “interpretation of the words requires further analysis”.
“The Act which is being commented upon by the UNC was in place during their previous term of office. It therefore remains open for debate whether the UNC’s interpretation of the Act derives from how they operated that Act during their tenure at the helm,” he said in a statement.
Gonzales said the RIC receives funding for its budget in accordance with the RIC Act, which had been in effect since 1998 and has been utilised by all governments in power in the same manner.
Gonzales said the cess (tax) collected by RIC from T&TEC was $9,639,145 in 2020, $12,095,303 in 2021 and $8,611,506 in 2022, for a total of $30,345,954.
The minister’s statement noted that Section 28 (1)(a) provides for the RIC to submit to the Minister a budget showing “Planned expenditure and revenues.”
Section 28 (2) provides for the budget to be laid in Parliament, while “Section 30 provides for the RIC to assess a cess against the service provider based on the minister’s approval”.
“Section 30(4) (a) then provides for the cess to be based on a proportional basis on the gross cumulative revenue of the service providers,” Gonzales said.
T&TEC largest contributor
“Therefore, it is true that the RIC relies on the service providers (plural) to fund the RIC. However, the budget of the RIC is determined by the RIC’s expenditure.
The proportion contributed by each service provider is based on their individual revenue compared to the gross cumulative revenue of the particular year.”
The minister further stated that “while an increase in revenue for a particular service provider would cause the RIC to receive more cess from that particular service provider, the total RIC’s budget request would reflect the needs of the RIC, thus remaining more or less fixed,” Gonzales said, adding that “while one service provider would contribute a higher amount, the other service providers would decrease their contribution”.
“A change to the revenues of any service provider does not mean that the RIC receives more cess.”
Gonzales said since T&TEC had the largest revenue, from inception of the RIC, as compared to other providers, the RIC would have collected a larger proportion of its cess from T&TEC.
“If another service were to increase its revenue, then T&TEC cess payment would fall,” Gonzales said.
As to whether the RIC collects “cess” from a service provider if it records a loss, Gonzales said “the Act deliberately allows RIC to collect cess against revenue to ensure that the RIC’s work is not compromised by the fortunes of the service provider”.
“This approach actually ensures that the RIC is not beholden to the service providers’ fortunes.
Therefore, the quantum of profit or loss does not factor into the equation,” the minister stated.
He said the RIC Act is “consistent with other Caribbean regulators for the income of the regulator to be based on the gross cumulative revenue of its Service Providers or members”.
According to the Cabinet’s approval, the RIC budget is allowed to have a limit of 0.6 per cent of gross cumulative revenue of the service providers, Gonzales said.
“Therefore, the RIC has been very frugal in setting its budget as our budget is substantially below the limit set,” he stated.
Addressing whether the RIC stood to benefit from a rate increase by T&TEC, Gonzales said the Commission “would have carried out its statutory responsibility by ensuring that the service provider is able to finance its activities”.
“The RIC does not stand to benefit from increased revenues to T&TEC as the receipt of cess income is fixed in total,” he said.
“However, because of the allocating between all service providers, the other service providers would be the beneficiaries of the increase to TTEC revenue.”
