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Jan 11, 2019

P.U.C. Accepts B.E.L.’s Explanation for Increase in Electricity Rate

Ambrose Tillett

Another increase in the electricity rate came into effect on January first, ahead of a meeting between Belize Electricity Limited and the Public Utilities Commission to rationalize its request for a price hike.  When B.E.L. met with the utilities regulator on Monday, the electricity provider reiterated that it used its strong financial position to briefly absorb an almost nineteen million-dollar increase in the cost of power that has been happening since May of last year.  Despite B.E.L.’s projection that the high prices may continue until the end of the year due to P.U.C. regulations, the company is required to apply for an adjustment to the tariff to recover the increase it has been absorbing.  In a previous interview with News Five, Electricity Director Ambrose Tillett explained how the regulations work insofar as electricity rates.

 

Ambrose Tillett, Electricity Director, P.U.C.

“When the government actually amended, the P.U.C. makes regulations and the government approves them.  When this amendment to the rate methodology was approved, was made in 2009, it was because by that time we had had several crises with energy prices because of the volatility of energy prices on the world market and so there was an amendment made to the regulations.  It used to be that rates were set every four years and adjusted every year.  What the commission started to do in 2005, what they call a threshold event.  In other words, if cost of power increase came above a certain threshold, I think the initial threshold was three million dollars, it would trigger a rate increase.  When you have a very volatile energy market you could end up with two, three rate increases in a year.  And so, each time they have tried to amend the regulation to deal with volatility and energy prices you end up with an issue and so the final version of the regulation which was made in 2009 says okay, you know what, we will do rates every four years, full rates every four years, we’ll look at these rates every year and then because cost of power is more volatile, we’ll look at it every six months.  So that is the current state of the law.”

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