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Jan 16, 2013

Were challenges at B.E.L. also put forward by previous owners before nationalization?

Leroy Almendarez

On Tuesday, the Public Utilities Commission held a press conference to present its final decision on the approved almost seventeen percent increase in electricity rates. The final amendment is for government to pay less for street lights and to pass on the shortfall to the consumers. It means that government will spend fifty-five cents per kilowatt hour below the sixty four cents projected, while consumers in the social rate will be paying forty-nine cents, one cent more than the forty- eight cents projected because of government’s decision to exempt itself from the increase in streetlight costs.  At the press conference the P.U.C. directors were also asked about whether the challenges identified in cost of power were the same justifications put forward by the previous owners of Belize Electricity Limited when they asked for an increase.  Here is how that played out.

 

Dr. Leroy Almendarez, Director, Tariffs & Administration, P.U.C.

“Personally my first response to that is I think that’s exhausted. That is something that we have responded to at least five times I think. But to give response to it, this is a cost of power event. At that time when they were asking for an increase; that was in 2008, there was also a situation if we remember and I’m not sure that is even worth repeating, there was also a situation where the rates were supposed to be released as well. The rates were supposed to go, I think from January or something like that, it was supposed to go to something like thirty-nine cents. So in terms of dealing with what the past owners were asking for, I’m not sure if I’m going to really get into that discussion again.”

 

Victor Lewis, Director of Electricity, P.U.C.

Victor Lewis

“I’m not going to dodge that question. Let me reword that because it might sound that I’m saying that Doctor Leroy dodged it.”

 

Dr. Leroy Almendarez

“Let me clarify something. That was not a dodging of that question, but I find it immaterial to what we are doing today. Let’s say for example that when they say that they were asking for an increase and they had gotten an increase.  I guess the next question would be, wouldn’t it mean that the company would have been viable up to now. The answer is we don’t know that.”

 

Victor lewis

“The reason why I think the question is worth answering; is worthwhile addressing is because we are talking about the integrity of the Public Utilities Commission here. That is the implications of that question to me. The cost of electricity as paid by the consumer is broken into two parts basically—the value added of delivery and the cost of power.  Doctor Leroy opened that discussion by saying this is a cost of power event. We are not talking value added of electricity. There is nothing in this that is addressing an increase or decrease in the value added of delivery. The law requires that B.E.L. does not make one penny and B.E.L. does not lose one penny on the cost of power. Whatever they buy or generate electricity for, the consumer has to pay.”

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3 Responses for “Were challenges at B.E.L. also put forward by previous owners before nationalization?”

  1. Lisa Lamb says:

    The Government needs to always have shares in any company that plays a major part in the country. For example WATER, POWDER, GAS, CABLE AND FOR SURE THE TELECOMMUNICATION.

  2. Ray says:

    At the time that the Government took Fortis shares, the Government through SSB owned 26% of the shares in BEL and the chairman of the board was the PM’s law partner. They must have known that BEL was not viable without an increase in rates because of the high oil prices. GOB through the PUC forced BEL into a cash flow crisis to take control so they could lower the rates for elections, knowing that the rates would have to be raised even higher than before.

  3. anton says:

    Lisa, you refer to just owning shares, or controlling the company? And if controlling, then where does it end? All gas stations? the Sugar factory? the largest hotels? how about banks?? Ever heard of socialism or communism? For your information, even the Chinese, a “communist” country, have realized that only the private sector creates wealth and runs businesses efficiently. You want our electricity and telecoms and gas and everthing else to be run like our current government ministries??

    Perhaps what you mean is that government should REGULATE all important sectors, but guess what, they already have the power to do just that and have screwed even that up!

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