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Jun 27, 2008

P.U.C. defends their decisions on electricity rates

Story PictureThis morning the Public Utilities Commission held a press conference to officially release its final decision on B.E.L.’s request for a rate increase. On Monday, the P.U.C. released a forty-four page document outlining the various price hikes B.E.L. requested and the eleven decisions taken by the Commission. Among them are: a raise in the Reference Price of Power, an increase in the Rate Stabilisation Account, recovery rate and a hike in electricity rates from forty-four point one cents kWh to fifty cents.

John Avery, Chairman, P.U.C.
“We feel that keeping the rates at forty-four point one cents right now, we can employ this automatic adjustment mechanism and perhaps keep the rate at a constant forty-four point one cents at least up until the end of December unless of course, our forecast proves to be considerably wrong. What happens is that starting January is when we typically enter the dry season in Belize. We get less power from hydro, we start to get more power from fossil fuels and so the cost of power starts to go up. So the point I want to make is that while we’re envisioning that we may be able to keep constant at the least up until December, if our forecast proves wrong then some upward adjustment, minor in the first instance, may be made to the rates after the new methodology is introduced. If our projections hold, certainly by January customers will have to understand that the cost of power keeps going up and at some point in time we will have to bear those costs.”

The P.U.C. promises that a new Rate Setting Methodology should be implemented in September to automatically adjust the cost of power component of rates on a monthly basis to reflect the current price of power. The R.S.M. will take the form of an account to track consumers’ monthly surpluses or deficits in the cost of power.

John Avery
“We’ve decided, and this will come as a result of the new Rate Setting Methodology that the CPRSA balance will be capped at the end of June. No other deferrals will be made to the CPRSA balance and any excess cost of power between July and August, any excess cost of power or anything that hasn’t paid down in the CPRSA balance, if it isn’t sufficiently paid down or fast enough then we will deal with those through the automatic adjustment mechanism.”

The Commission estimates that the Cost of Power Rate Stabilisation Account balance of two hundred and forty-three thousand dollars will be paid down by June thirtieth of 2009. The CPRSA was initially intended to cushion the blow to consumers against the rising cost of power. Avery says customer tariffs will remain unchanged.

John Avery
“Because we haven’t moved the Mean Electricity Rate we decided to leave these as they are. These were set up based on previous tariff studies that were done and until we do a new tariff study to suggest that perhaps different classes should be paying different rates we have no choice but to implement the same rate.”

And where the Mollejon transmission line is concerned, the report was explicit in stating that the line is a form of contributed capital to B.E.L.

John Avery
“Again, we felt this line was paid for by B.E.L. at no benefit to the customers. B.E.L. promised a benefit in terms of a reduction in the rates to be paid to BECOL instead we’ve seen the rates to BECOL increased. B.E.L. already owned the line, the customers were already paying for it through the rates to BECOL. We do not feel that the customers should pay for this line a second time. We also feel that these type of things contributed significantly to the cash flow problems that B.E.L. claim they now face.”

The reaction from B.E.L. was swift and this morning the company announced that it will legally contest the final decision of the P.U.C.

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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