Talks for the establishment of a utility regulator started over 20 years ago. By 2003, the Government of Vanuatu’s comprehensive reform program required that a regulatory framework needed to be established to improve the efficiency and competitiveness of Vanuatu's economy by achieving reform in the electricity and water sector and boosting the performance of Government Business Enterprises at the time. Under the World Bank’s Public-Private Infrastructure Advisory Facility (PPIAF), a review and assessment were undertaken on the related market players' structure and institutional models.
The two major sectors targeted were; (i) utilities (electricity & water) and (ii) telecommunications. The Asian Development Bank’s Energy studies also identified as part of the Government Energy Policy Framework study (2005-2006) under the Urban and concession areas insisted on an appropriate regulatory framework being in place.
The Office of the Utilities Regulatory Authority was established with the Government passed the Utilities Regulatory Authority Act No. 11 of 2007. Under the World Bank Energy Sector Program funded through Australian Aid (at that time Governance for Growth), the URA was established with mandates to regulate the electricity and water services sector. The Government of Australia supported the URA for the first eight (8) years (2008-2016) of the establishment of the URA. As of 2016, the World Bank funding has ceased and today, the Authority is operating on 70% consumer levy monies collected and paid by utility operators and 30% Government grants. A major financial challenge was overcome by the establishment.
The right of the Authority to collect levies was granted through an amendment to URA Act which was introduced in Parliament by the Government - the Utilities Regulatory Authority (Amendment) Act No. 19 of 2016.
Initially, the Authority was housed as a Unit within the Ministry of Finance and Economic Management and was headed by a three-member Commission consisting of two local commissioners and one internationally recruited commissioner selected to build the local capacity, one of which was the CEO. To date, the Commission of the Authority is made up of local Commissioners. The URA now occupies its own premise and to date has opened a branch office in Luganville, Santo in 2019.
To date, the Authority has grown to be a fully-fledged Independent regulatory institution with a Team of Electrical Engineers, Economists, Financial Auditors, Legal, and Administrative staff and also regulates six (6) Small Water Supplier on Efate, two (2) main Water utilities (UNELCO and Department of Water); three (3) electricity concessionaires (VUI- Operating on Santo, Maewo, Ambae, and Sola); UNELCO (Operating only on Efate); VANPAWA (Operating on Malekula and Tanna Island); Two (2) Electricity Mini-grid (Wintua and Lorlow on Malekula and Loltong on Pentecost).
The Authority is also one of the three founding members of the Office of the Pacific Energy Regulator Alliance (OPERA) together with the Electricity Regulators of Tonga and Samoa. OPERA is a regional body that regroups together the Electricity Regulators in the Pacific Region.
In 2022, the Authority has put out its Strategic Action Plan for the period from 2022 to 2026.