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#396100 - 01/01/11 12:01 PM GOB tries to buy power from Mexico and sell to BEL
Marty Offline

Lynn Young

The Belize Electricity Limited has for years been purchasing power directly from Mexico’s Comision Federal Electricidad. But that can now change since the Government has applied to the Public Utilities Commission for a license to purchase the power for resale to BEL. The new arrangement will be operated under the Ministry of Finance and while there have been discussions; it was raised during the official visit to Mexico, by the Prime Minister in October. Currently, BEL has two contracts with the Mexican state owned company: an economic energy agreement to purchase power at reasonable rates, and an emergency agreement where if Belize experiences electricity problems from other suppliers, CFE can provide the power on an emergency basis but at a higher price. BEL’s President and Chief Executive Officer, Lynn Young, told News Five that the government to government relationship is influencing the new arrangement.

Lynn Young, President, B.E.L.

“I think the intention by the government is to try to get better rates from CFE for customers. I think they feel that with the government to government relationship that they have with Mexico they are in a better position to get better rates from Mexico than we are cause right now the power from Mexico is like our second highest cost of power. The hydro is cheaper, the power from the bagasse plant is cheaper. The other thing about it is that in 2008 when the PUC had refused to match the increasing costs, since then the banks have frozen our credits and the contract the contract with CFE that we have, we have to establish a letter of credit to buy power from CFE but we can’t because our finances have been frozen. So since 2008 the Government has put a letter of credit in place so that we could continue to buy from Mexico.”

Channel 5

#396101 - 01/01/11 12:02 PM GOB tries to buy power from Mexico and sell to BEL [Re: Marty]
Marty Offline

Will electricity rates increase in 2011?

But what can Belizeans expect in terms of electricity rates for 2011? Well, that is still up in the air, according to Young, because there are many factors that have bearing on electricity rates, including the skyrocketing diesel prices and an increase in taxes. But if the local supply from the hydro dams and the bagasse plant at Tower Hill in Orange Walk improve to full capacity, then prices are likely to remain the same.

Lynn Young

lynn young

“The one thing that is going to affect us has been the increase in taxes. Our taxes have been increased by ten million dollars a year last year and I think there’s going to have to be an adjustment in rates to deal with that but I think if the government can get some lower costs from CFE and if the bagasse performs the way we hope it would, that might offset the increases in taxes that we have been paying and maybe we’ll be able to keep the rates – at least try to keep it where it is right now. Right now the rates are frozen because the courts put an injunction to stop any changes in rates until it has reviewed the 2008 decision. We went to court over that, the hearings have been completed and we’re awaiting a decision from the court on that. Once the court has made a ruling then we will have to go back and make an application for rates. Like I said, without the taxes, rates won’t be going up next year, but with ten million dollars additional taxes, definitely – and it’s not that we want to increase rates but we can’t get the banks to lend us money unless we can show that we’re making a reasonable return. Not only the taxes have increased but the license from all the different municipalities have been increasing their license fees and their business license, in some cases it has tripled so the inflation that’s there, which is driven by the taxes and the increasing oil prices and all that is putting a lot of pressure on not just BEL but everybody. Like I said, the best we can do might be not to have to ask for a rate increase in 2011.”

The court ruling is expected by the end of January, 2011.

Channel 5


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