PHILIPSBURG--The new electricity concession between utilities company GEBE and government can be signed post-haste with the approval of the new electricity ordinance by the Island Council on Monday night.

"Caretaker" Commissioner Theo Heyliger presented the ordinance to the Island Council and it was adopted by the nine members present.

Democratic Party (DP) Island Councilman Leroy de Weever, who had been present earlier in the meeting, was absent with notice by the time the new ordinance was handled. Commissioner Frans Richardson was absent from the meeting with notice.

The ordinance and new concession have been a topic of intense discussion in the community, because GEBE has been fined some US $300,000 in the past months by financier Pacific Life because the new concession was not in place a year in advance of the expiration of the current one.

Heyliger had maintained that he would note submit the ordinance and new concession to the Island Council until they were worked out to the benefit of the people of the island who have been suffering from high electricity bills.

DP Island Councilman Roy Marlin pointed out in the debate that due to his party's insistence, the right to regulate a variance cost for the operation of the still-to-be-constructed waste-to-energy plant was still up to the Island Council to decide. The Executive Council had first proposed that that cost be regulated by the commissioners rather than the Island Council.

As the exact cost of the waste-to-energy plant is not yet known, it would be "dangerous" to leave this tariff solely in the hands of the Executive Council, he said.

Councilman Marlin also enquired about the new tariff structure for GEBE to remedy the high fuel clause fee levied on residents. Heyliger said GEBE had developed a new tariff structure and this was being overseen by the Bureau Telecommunication and Post (BTP), which provides the same service for Curaçao.

National Alliance (NA) Island Councilman Rodolphe Samuel questioned whether the new waste-to-energy plant would also require a concession to produce energy that would be sold to GEBE as green energy. Heyliger said a concession would be necessary and would come to the Island Council in due time.

Heyliger told the council that GEBE had had a licence for the operation of an establishment for the generation of electricity, as well as for the distribution and supplying of electricity to third parties in St. Maarten, since January 1, 1961. The licence was granted for 50 years; thus it terminates on January 1, 2011.

GEBE had approached the Executive Council in 2008 with the request for an extension of the concession, or the granting of a new concession based on the new ordinance. A joint project group was instituted that recommended, among other things, replacing the current legislation with a new ordinance containing rules with regard to the granting of a concession for the generation and supplying of electricity.

The new ordinance shall be the legal basis for the new concession to be granted to GEBE. A number of new elements have been included in the ordinance and concession.

Heyliger explained that the exclusive concession to be granted had been used as point of departure. "The exclusive character was already in existence, but had been incorporated into the concession itself and not in the regulation which formed the basis for this. Based on the proposal, a concession may only be granted to a single enterprise. That enterprise must be a company established according to Dutch Antillean law. As is now the case, the concession is non-transferable."

In the future, generation and distribution for private use shall no longer be allowed, other than for "back-up" reasons. The economic interest of the concession holder GEBE exceeds that of "self generation."

"With existing installations for private use, one must think in particular of hotels and resorts that maintain their own establishments for the generation of electricity. Existing installations for private use shall be tolerated for three years after the implementation of the new ordinance.

"Such a term is considered sufficient from a financial point of view for the consumers in question and from capacity considerations for GEBE, for the transfer to the purchase of electricity from the concession-holder."

There are a number of exceptions to the exclusive character of the concession. Of importance is the exception for the generation of electricity from the energy released from the incineration, gasification or other processing of waste materials.

The commissioner said the Executive Council had the firm and concrete intention to have an installation for the generation of electricity through the processing of waste materials in St. Maarten. The energy resulting from the processing of waste materials shall be supplied in the form of electricity to the distribution network of GEBE. The utilities company is compelled under the new ordinance and concession to purchase "green energy" from the waste-to-energy plant.

The Executive Council is striving to stimulate the application of so-called "green energy." The concession will state that starting on January 1, 2015, as a supplement to the energy obtained from the processing of waste materials, at least two per cent of the electricity shall have to originate from green energy.

The new ordinance introduces a concession contribution to be paid by GEBE to government. The contribution has been set at an annual amount of NAf. 5 million, to be paid in four instalments. This amount shall be adapted annually, depending on the growth of the Central Bureau of Statistics (CBS) index for family consumption. In addition, the fixed part of the contribution is subject to a periodic evaluation.