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Dec 28, 2018

G.O.B. to P.U.C.: Hold off on Electricity Increase Until After June 2019

John Avery

In a letter written by C.E.O., Doctor Peter Allen earlier today, the ministry states, “that any potential losses to B.E.L. due to the variance between the Reference Cost of Power and the Actual Cost of Power for the period January to June 2019 should be evaluated at the subsequent Annual Review Proceeding.”  For all intents and purposes, government is asking that the implementation of the new rates be staved off until that exercise is completed post June of next year.  Chairman Avery explains why the cost of purchasing energy from Mexico has gone up and how B.E.L. has been absorbing that increase.  He also says that the existing rates are lower than they were a decade ago.

 

John Avery, Chairman, Public Utilities Commission

“We came up eventually with a rate of about forty-two cents, which is of course half cents higher than B.E.L. requested.  However, as I pointed out, there were some errors on B.E.L.’s submission.  This excess cost of power basically can mostly be attributed to higher prices from Mexico.  There are times when, during the last eighteen months, that Mexican power has been higher than some of our most expensive local sources, barring fossil fuel generation, even though at times of the year it is lower than most of the sources in Belize, the point is the prices that we pay are still higher than what were projected during the last rate review.  So the P.U.C. approved a total for cost of power based on forecast provided by B.E.L. working with the representatives from Mexico and it turns out that the prices have been higher than those forecasts.  In our own investigation what we’ve found is that there’s been a gradual increase in the cost of power in Mexico ever since they did their market de-regularization. This current rate is lower than what it was ten years ago, and in fact in the last five years the country of Belize has seen some of the lowest rates in its history, you know.  So we had a period of good and right now we’re just, we’re going through a little period of bad, but yeah, we will take steps to improve it.  I can’t say what impact it will have on rates in the short term, but certainly in the long term that is the whole objective of the P.U.C. and B.E.L.  We would like to see long term rates stay around thirty-five cents; however, to do that, we have to access rates well below twenty cents at this time, electricity rates, you know, from producers.”

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