The transparency of the Regulatory Authority was called into question during a court case examining the watchdog’s rate-setting procedures.

Belco is taking legal action against the regulator, claiming that it failed to consider certain factors when refusing a price increase sought by the utility. The RA rejected Belco’s 2022-2023 recommendation for a 16 per cent increase in part of its bills — the base rates — and instead allowed for a 7.5 per cent increase.

Nigel Burgess, the head of regulation at the RA, was cross-examined yesterday by Francis Tregear, KC, a British-based barrister representing Belco in the case being presided over by Puisne Judge Larry Mussenden.

Mr Tregear made the case that the RA team, which included Mr Burgess, did not provide sufficient information to Belco during the rate-setting process including details of how it calculated the utility’s rate of return.

He said that Belco provided the RA with a great deal of material during the process which started in June 2021, but added: “The only place we can find what was taken into account is in the rationale.”

The rationale was delivered along with the rejection decision in March last year.

Mr Burgess defended the RA’s actions, saying that it had conducted meetings and workshops with Belco to help it to understand rate-setting measures and provided the formulas used to calculate the rates.

Mr Burgess confirmed that instead of providing Belco with the calculated figures, the RA expected the utility to do its own calculations, with Mr Burgess claiming that “any reasonable expert” could do so. The authority also refused Belco’s request to share a report into the rates by RA consultant Ricardo.

Mr Burgess said that information was provided to Belco such as source documents and worksheets and it also provided deadline extensions and accepted late submissions from Belco.

Belco’s final tariff application proposed an allowed revenue of $242,162,115 for 2023 but, following a review, the RA set it at $230,461,387.

Mr Burgess said it took the RA work, time and effort to produce the documents and it was considered intellectual property that was “not appropriate to hand over to Belco”. He said a timeline had been set out and there were implementation dates to adhere to and that it had to consider the rights of the customer.

Mr Tregear said that Belco requested points of principle — the reasoning behind the rejection and the rates it set.

After the RA issued its decision, Belco requested further meetings but the RA said it was only interested in being informed of any glaring errors or omissions.

Mr Tregear suggested that the course of events reflected “a hostile relationship between the regulator and Belco”.

Mr Burgess disagreed.

However, he said it was unreasonable for Belco to have a “continuous process of review”, saying there had to be a cut-off and that the RA expected the utility to do its due diligence and provide a full response.