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May 7, 2018

Cost of Power Increased; Consumers Decrease Use

John Avery

There are two reasons, according to the P.U.C., that B.E.L. is getting back some six million dollars in what are called “annual corrections” based on the most recent annual tariff review proceeding, from July 2016 to June 2017. One is capacity charges for the mile eight George Price Highway gas turbine which came on stream in 2003 and has depreciated in value over the last fifteen years. The other, surprisingly, is a reduction in electricity use by several classes of consumers which lowered B.E.L. sales, dating back to Hurricane Earl’s ravages in 2016.

 

John Avery, Chairman, Public Utilities Commission

“The thing for West Lake basically is like one point five million for next year; that all came out in one year. The thing is, like I said, when P.U.C. approved – it’s not really a rate; but a cost recovery structure for that thing, because remember B.E.L. is not paying itself a rate, so it’s not a rate; basically, what we said is this is the return you’ll get over the fifteen years; this is depreciation; this is the OpEx; this is for fuel, that sort of thing and you just add that to the revenues; it’s not a rate B.E.L. is playing itself – that thing was for fifteen years and the plant was fully depreciated during that fifteen years. So as far as we are concerned, the book value of that plant now should be zero. But B.E.L. still kept the same monthly amount in their projections for an additional six months. Now in discussions that Mr. Tillett had with B.E.L. – again, this is something for the next A.R.P. when we explain ot them what the Commission is thinking; we haven’t committed to a firm figure yet, but we intend to reward them for maintaining the facility – when we mentioned it to them, they proposed that they would then perhaps like to increase the value of the plants by doing some adjustments to it, so that it can use natural gas as opposed to diesel. But we’ll have to consider that and see how soon they can get that and then see if that adds any value to the plant. The sales were a bit lower than what they projected, not much, but a little lower.”

 

Ambrose Tillett

“It’s about half the corrections, the revenue requirement.”

 

John Avery

“There’s a one point seven million, normally we spread out those things, in relation to Earl. If you notice, with these things, the corrections are all spread out – that is the only one that in one year we did that, because we felt at the time, based on B.E.L.’s own submissions that we would actually spend less than what was approved on cost of power, and so we could accommodate this one point seven million without worrying about it. Unfortunately, it didn’t turn out that way.”

 

 

B.E.L. has noted less electricity being used by industrial and commercial clients, particularly in the aquaculture and citrus industries, and seasonal fluctuations for residential customers.

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