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Nov 10, 2009

B.E.L.’s CEO takes on Public Utilities Commission

In respect of its challenges with the Public Utilities Commission, Young explained that B.E.L. has not been able to sit down in the past year with the P.U.C. and that all issues are taken to the courts for settlement. Young also spoke of the report of an independent expert who found that the P.U.C. was wrong on reversing a decision taken years ago by B.E.L.

Lynn Young
“Finally, the court has appointed the same independent expert to come back and give a report to the court. There were about sixteen questions put to the independent expert and all sixteen questions the expert found that the P.U.C. was wrong. It could be again that the court may decide yeah the P.U.C. was wrong but they could do what they did legally. He said—because the expert is not pronouncing on whether or not what the P.U.C. did was legal. What he is saying is that this is not the way to regulate an electric utility; to make up these back charges that go back seven years to reverse charges that had been approved, for example the hurricane rehabilitation and different issues. He is saying you can’t do that to a utility because the utility gets its financing based on the decisions from the regulator. So when we go and we borrow fifty million dollars, forty million dollars to do projects we are showing the banks that this is how much cash we expect to make and it is based on these decisions. And if seven years later you come back and say oh I don’t like that decision, reverse it, you have to pay it back then obviously it destroys the basis for you to finance the operation. So that is what he is explaining in his report.”

“The ironic thing is that there is no need for an increase in rates now and we’ve already made the P.U.C. and the government know that because the Chalillo project actually over produced last year. On top of that oil prices dropped drastically last year. Now it’s on the way up back again but with BELCOGEN coming online and Vaca coming online, which are insulated from oil prices, we think we have things under control.”

Young says that in the past two years, no dividends had been paid to shareholders.


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