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Dec 28, 2012

But increase not quite what B.E.L. asked for

B.E.L. will get an increase in rates, but not quite the amount it asked for overall. In its December tenth submission, B.E.L. stated that the Mean Electricity Rate (MER) increased from point four-one-eight-one cents per kilowatt hour to point five-five-seven-eight cents per kilowatt hour. That would imply an increase of close to fourteen cents overall. But the MER was increased to point four-eight-eight-six cents. Instead of a fourteen cents increase in the MER, B.E.L. got a seven cents increase which still mounts to a burdening sixteen point eight seven percent increase on bills. John Avery explained why.

 

John Avery, Chairman, Public Utilities Commission

John Avery

“B.E.L. made some projections that did not take into account the corrections that were in favor of consumers. B.E.L.’s projections were based solely on their increased cost that they experienced in 2012 and going forward. In their projections, the numbers that they put up, they did not take into account twenty-five million that were still owing to consumers from 2008 from the Cost of Power Rate Stabilization Account. So that made a big difference. In addition to that, we reduced slightly the expected cost of power from Mexico because we are aware and we are being a bit optimistic in this regard; that we have a delegation that will meet with the president of Mexico in early January—I think the date slated is January seventh—the Prime Minister himself will be a part of that delegation. We are hoping and are a bit optimistic that we can get a more blended cost from Mexico, as we have enjoyed in the past; that we will be getting some firm capacity from Mexico. At this stage, Mexico sells us power on an economic basis only. This means basically that we pay for their highest rate at the time. So if they have ten different sources, we pay the rate at the most expensive source that they bring on last. So we are hoping and we are a bit optimistic that we should be able to get a more blended cost from Mexico as we have been able to get in the past through diplomatic channels; that we will be able to—not to see the rates that we have seen in the past, but certainly not to see the continuing increases that we have seen over the last twelve months.  B.E.L.’s projections did not include anything. And when we looked at what B.E.L. asked for, they did not specify a specific mean electricity rate. They did not propose any rate. They just gave us projections for certain costs that they expected. And when we put all of those together, the actual cost was more like fifty-five point seven eight cents when we calculated what the difference would be. Even with the figures they gave us and factoring everything, we did not arrive at that mean electricity rate that we calculated from their submission that they made to us. But like I said, these are based on the figures that we put together based of certain corrections that were in favor of the consumers. We decided that because consumers were not allowed to recover all of that in one year, they were allowed to get that over the full tariff period; that any previous deficit from B.E.L. would be treated the same way. So we put that over the full tariff period rather than to be recovered over the next six months.”

 

The bye laws that were implemented in 2008 allows for the Public Utilities Commission to execute monthly adjustments. If there is fluctuation in the MER, Avery says they will make the necessary adjustments. The next rate review is scheduled for April first, 2013.

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2 Responses for “But increase not quite what B.E.L. asked for”

  1. david says:

    Any body knows that a business can’t sell something for less than it costs them for long.
    We dont like rate increses but we do like our relyable electricty. Like gasolene, just tighten the belt a little tighter

  2. O.Walk observer says:

    Everything and anything Government touches/takes over, turns to sh-t. When Barrow will learn and not allow politics to interfere with business? Even incompetent people are in high places running the affairs of BTL and BEL, what a shame and disgrace to have to take away the people’s money from SSB in order to keep once profitable companies running. Both companies were profitable, untill they were taken over by Government. Shame, but our hard headed Prime Minister will not listen to any advice!

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