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Feb 27, 2018

B.E.L. Enters Stronger Relationship with Mexico’s C.F.E.

Belize Electricity Limited, one week ago, signed a new power purchase agreement which continues B.E.L.’s ability to buy more from Mexico and create new opportunities for energy trade. With stable rates, B.E.L. is positioning itself in the regional market by working with one of the ten replacement companies for Comision Federal de Electricidad, CFE Calificados. But does that mean cheaper electricity prices? News Five’s Aaron Humes delves deeper in this report.

 

Aaron Humes, Reporting

Just a few years ago, Belizeans were more likely to have the lights off rather than on due to faults on Belize’s link with Mexico, not to mention regular rate increases. But after some early stumbling, rates have stabilized and Belize Electricity Limited is preparing to make some moves in Mexico’s energy market. B.E.L. C.E.O. Jeffrey Locke outlines the primary benefits of the new fifteen-year agreement.

 

Jeffrey Locke

Jeffrey Locke, C.E.O., Belize Electricity Limited

“With this new agreement, it will give us an opportunity to sell excess energy, when we have, to Mexico; that will allow us to have more sales of energy along our lines, which will then reduce our unit costs. So by reducing our unit costs, it will give us an opportunity in the future to be able to give customers more competitive prices. We will now be invited and allowed to compete in the Mexican market. So when we are inviting suppliers for Belize, we can say, ‘it’s not only Belize you’ll have the opportunity to supply; you’ll also have the opportunity to supply into the Mexican market.’ Once they are able to provide reliable electricity at a competitive price, then it’s not only the Belizean market that should take a look at that opportunity, but the Mexican market as well.”

 

But should we expect cheaper prices soon considering that Belize buys as much of its power –forty percent – as we do from the hydro-electric dams on the Macal? For the answer we turned to B.E.L. senior manager Ernesto Gomez.

 

Ernesto Gomez

Ernesto Gomez, Senior Manager, Energy, Stores and Regulatory Affairs, B.E.L.

“Whenever it’s a cold day in Mexico and the demand is very low and also a cold day in Belize, prices can go as far down as four cents U.S. per kilowatt-hour; but when it’s a very hot day and the demand is very high and the congestion is very high, prices can go very high – as high as twenty-five cents U.S. per kilowatt-hour. So it’s the opportunity that exists. And at an average, CFE is cheap; we just have to make sure we take advantage on the hourly basis, on when the prices are right for us to purchase.”

 

Purchases are wholesale and therefore not price-regulated; there is an hourly auction of power by CFE in which B.E.L. participates. It is a result of Mexico’s energy reform initiative which it established in 2014. But the part of the agreement which B.E.L. expects will help Belize is the chance to trade, which Gomez explains.

 

Ernesto Gomez

“It becomes real in the rainy season, when the dams are spilling [over]; and in the early hours of the morning, the power required in Belize is very little, and as a result we are unable to take all the power that is produced in the hydro-electric dams in the Macal River. As a result we waste the water going down the river, which we are never to recover. So in this wholesale market, for those hours, we are able to offer that extra power, that we would have [otherwise] wasted in the river, with a little profit, into the Mexican market. And if their prices are right, we will be able to sell that power at any given time. And of course, that becomes the revenue that is shared with all the customers.  That gives us that capacity; to keep the rate stable, and of course, if we started to add generation into the country, at the right price, that we are able then to sell to the Mexican market, it can assist in lowering the rate in the future.”

 

CFE Clasificados’s representative says it is looking forward to working with B.E.L.

 

Katya Silva

Katya Silva, Director General, CFE Clasificados

“We are very committed to work together with Belize; this is a key relationship for us. It was the first customer that CFE Calificados as an affiliate of CFE had a year and a half ago, and this represents something that we are very proud [of]. This is a very important customer for us [and a] partner as I said, and we feel honored that Belize has trust in CFE Calificados to do business together. And in terms of expanding the relationship to new areas, of course Calificados feels confident that we can do business together and to bring Belize participating in the Mexican market as well.”

 

Aaron Humes reporting for News Five.

 

The Power Purchase Agreement was signed at B.E.L.’s Corporate Headquarters and witnessed by the representatives from the Ministry of Foreign Affairs, Mexican Embassy, the Public Utilities Commission and B.E.L.’s Board of Directors.

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