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#454284 - 12/29/12 01:57 PM Electricity Rates Going Up By 17%
Marty Online   happy
The PM said his Christmas Gift to Belize was the renegotiated Superbond - but the PUC's new year's gift is not quite as nice: it's a 17% increase in electricity rates!

That's right, the rate that was reduced to 41.6 cents per-kilowatt-hour one year ago - is now going up to 48 cents per kilowatt hour! That's the upshot of an annual review proceeding which was concluded yesterday. Chairman of the PUC John Avery broke the bad news at a press conference this afternoon:..

John Avery, Chairman - PUC
"The new approved electricity rate is now 48.86 cents which is approximate 16.87% above the existing 41.81 mean electricity rate."

"Because this is a fairly big increase certainly it will put our productive and business sector at a disadvantage comparatively. It's not something we like to do and we try to minimize the impact on consumers while not putting any additional strain on the utility "

And as Avery explained that strain on the utility is because of sharp, unforeseen increases in the cost of power coupled with very low rainfall leading to poor hydro-electric production.

It got so bad that at some points BEL was forced to buy power for 32 cents more than they were selling it!:

John Avery, Chairman - PUC
"The power from BAL was at 73.96 cents per kilowatt hour. So basically BEL was selling at an average of 41.61 cents; meaning that they were losing 32 cents every time they sold 1 kilowatt hour of energy from BAL. From their diesels, the average price was 59.48 cents, from it was turbine, the average price was 60.78 cents. There were some significant losses. All in all BEL is projected to spend some 45 million more in cost of power than was projected up to the end of December 2012."

It's actually 44.8 million dollars in increased cost of power expenses which led to this review of the 2012 decision. The largest part of those tens of millions was paid to CFE - the Mexican Power company - upwards of 90 million dollars to purchase at a rate sometimes exceeding 37 cents per kilowatt hour.

Avery explained how that was the main driver of the increased cost of power:

John Avery, Chairman - PUC
"We never anticipated the drastic increases in power from Mexico. BEL may have been a bit too optimistic in not trying to secure a firm capacity contract from Mexico. Certainly a major factor is the lower rainfall that was experience through the year which had a domino effect and basically forcing us then to buy more power from Mexico at a higher rate. At this stage Mexico sells us power on economic basis only which means basically we pay for their highest rate at the time, so if they have 10 different sources, we pay the rate at the most expensive source that they bring on last. We are hoping and we are a bit optimistic that we should be able to get a more blended cost form Mexico as we have been able to get in the past through diplomatic channels."

As Avery explained, those channels will be pursued when the Prime Minister leads a delegation to Mexico next month to meet with the new President Enrique Peña Nieto.

And so, to review, the average rate will be 48 cents per kilowatt hour and that goes into effect on January first. But those who object to the increase can write to the PUC by January seventh.

BEL may be one of those objectors. Thought it did not ask for any specific increase in rates, it sent in its cost of power figures - and the PUC calculated that the utility was asking for an increase up to 55.7 cents per kilowatt hours. They ended up getting half of that. A release from the company this evening says will review the decision.

And any sober member of the public may want to review last year's decision - which brought the rate down three and a half cents per kilowatt hour right before an election. We asked the PUC Chairman about that:..

Jules Vasquez
"It was at 44 cents. In an election it was reduced to 41.6 cents and now it's being reduced to 48 which more or less evens it out, its slightly over compensated."

John Avery, Chairman - PUC
"It wasn't anything political Jules. As I explain to you, if you look at what we do here we work with the numbers we have."

Jules Vasquez
"FORTIS have been asking, I can't remember the years but for at least 20 months for an increase. They said that they were broke, they had a cash flow crisis, they could not service their debts - are we faced with the same thing? Shouldn't you all have just....."

John Avery, Chairman - PUC
"FORTIS wanted an increased because they wanted to increase their profits. If you notice what we have here is based solely on expected increase in cost of power. There has been no adjustment to any part of the rates that accrue to BEL. These are strictly for cost of power. Under the law cost of power is a direct pass through; BEL is not allowed to suffer any losses from it."

Those with objections to the new rates can send emails to info@puc.bz.

Channel 7


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#454290 - 12/29/12 02:23 PM Re: Electricity Rates Going Up By 17% [Re: Marty]
Marty Online   happy

Electricity rates will go up by over 16% in 2013

The Christmas season normally means that a few pounds will be carried on the waists of Belizeans in the New Year, but it seems that your next electricity bill may also have quite a few dollars more added to it. Electricity rates are going up by sixteen point eight-seven percent. Residential rates will carry a minimum charge of six dollars while from zero to fifty kilowatt hours will be thirty-eight cents; fifty-one to two hundred kilowatt hours will be forty-eight cents, and anything above two hundred kilowatt hours will be at fifty-one cents. According to the Public Utilities Commission, B.E.L. spent roughly forty million dollars more due to an increased cost of power from January 2012 to November 2012. That was because of increased rates from Mexico’s CFE, a depletion of bagasse supplies for BELCOGEN, and lack of performance at the hydro dams due to low rainfall. B.E.L. made its submission on December tenth and PUC Chairman John Avery announced the commission’s decision today.

John Avery, Chairman, Public Utilities Commission

“The P.U.C. has determined that in order for B.E.L. to recover additional costs that has been incurred for Cost of Power in 2012 and to allow it to cover the expected cost for the next six months, the commission has prescribed an approximate sixteen point eight-seven percent increase in rates; moving the mean electricity rate from forty-one point eight one cents that was approved in the 2011/2012 full tariff review proceedings and has increased that to forty-eight point eight six cents. As described in this paper, the major reasons for the differences are one; we had unexpectedly low production from BECOL due to unexpected low rainfall during 2012. Unfortunately, unless something happens within the next couple weeks, this situation with BECOL getting slightly lower production will continue to persist in the upcoming six months, which is the traditional dry season for Belize. So certainly, we see no relief from BECOL unless something extraordinary happens within the next couple of weeks; that the damn level can go above or reach expected levels at this time. The other issue that we had was BELCOGEN was unable to produce the amount of power that we expected from them. And in fact, BELCOGEN has seized productions for over two months now. B.S.I. started to grind cane so their bagasse supply is building up and we expect them to be able to supply us with the usual amount of power over the next si months. The next major issue we had which is compounded by the lower production from BELCOGEN and BECOL is that we have been getting much higher prices from Mexico, CFE Mexico.”

Avery said that 2012 was a year that consumers also increased their consumption of electricity.


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

“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.

Channel 5


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#454427 - 01/01/13 02:02 PM Re: Electricity Rates Going Up By 17% [Re: Marty]
Marty Online   happy

Light Rate Goes Up Tomorrow!

Effective tomorrow your electricity rate is going up! As we told you on Friday, the Public Utilities Commission has made the decision based on BEL's cost of power in the past year - which skyrocketed!

It went so high that the company ended up spending 45 million dollars more than it had budgeted to buy power. The company sent its figures to the PUC for the annual review - and when the PUC did the math, the Utility was effectively requesting a rate increase to about 55 cents per kilowatt hour - about one-third more than the 41 cents you are currently paying.

PUC gave them half of that - which works out to about 48 cents per kilowatt hour. It's still a 17% increase for you as the PUC Chairman explained at a Press Conference on Friday:

John Avery, Chairman - PUC
"The new approved electricity rate is now 48.86 cents which is approximate 16.87% above the existing 41.81 mean electricity rate."

"Because this is a fairly big increase certainly it will put our productive and business sector at a disadvantage comparatively. It's not something we like to do and we try to minimize the impact on consumers while not putting any additional strain on the utility "

BEL declined comment today saying it was still reviewing the PUC Decision and would comment in the New Year.

The main cause of increased costs is power purchased from Mexico. More had to be bought this year because rainfall was low - causing below average hydroelectric production.

Though the new rates go into effect tomorrow - you still have seven calendar days to write to the PUC with your objections.

Channel 7


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#455346 - 01/16/13 09:01 AM Re: Electricity Rates Going Up By 17% [Re: Marty]
Marty Online   happy

P.U.C. delivers its final decision on electricity rates; there’s good news for G.O.B.

Many Belizeans welcomed the New Year with a cringe following the announcement at the end of December that electricity rates would increase by as much as sixteen point eight-seven percent effective the first of January. Since the announcement, many have prepared – at least mentally – for what is sure to be more dollars spent on electricity bills. The Public Utilities Commission today said that it has received and reviewed the comments on the proposed increase.  In total, only three comments were submitted by the Belize Electricity Limited, Belize Telemedia Limited and the Government of Belize. Now, based on the comments put forward, specifically that of the government, the P.U.C. has made some amendments to that final draft. The amendment is reflected in two areas, a division of commercial class into two categories and maintaining the existing tariffs for government in regard to street lights. In other words, government will not experience an increase in their bill for street lights. It’s a saving of nine cents per kilowatt hour, but what about the consumers? Essentially the sixteen point eight-seven percent increase will be reflected on your bills. The P.U.C. held a press conference this afternoon at the Radisson where Director of Tariffs and Administration, Doctor Leroy Almendarez and Director of Electricity, Victor Lewis, briefed the media on the commission’s final decision to maintain the government tariffs on street lights and what it means for the rest of consumers.

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

Leroy Almendarez

“According to the comment that we got from the Government of Belize, or the commission received from the Government of Belize you will notice that the government is saying that when the tariffs were reduce or the rate was reduced or the MER (mean rate of electricity) was reduced from forty-four point one to forty-one point eight one percent per kilowatt hour, the rate for street lights remain the same in other words; in other words it was not affected there was no change in the fifty-five cents per kilowatt hour.  What the government is saying in their comment is that they did not get any relief when it was reduced by six point one four cents. And so therefore, it means now they are saying that yes they provide the relief they pay and the commission is saying yes there is a direct benefit to consumers from street lights. The government states in their comment that the additional nine cents per kilowatt hour would then mean additional expenditure when in fact they said they did not get the relief. Here is where we are, the increase that was mentioned by the chairman on December twenty-eighth is the increase that stands. The increase in the MER or the increase in tariffs is sixteen point eight seven percent; that is the increase. Now, what the commission did was to revisit the cost of street lights and decided that yes and I will read clearly what the commission said. The commission says that: “The PUC considers it to be the right of G.O.B. to reduce any subsidies that it provides through electricity tariffs and so. As such, the P.U.C. decided to maintain the existing tariff for street lighting; that is fifty-five cents per kilowatt hour, which provides a direct benefit for all the consumers of B.E.L.—which is true. And to spread the resultant shortfalls and expected revenues—because one of the things you must remember if that is reduced of remains the same as fifty-five cents, then it means that if that nine cents is not redistributed then the increase would not be sixteen point eight seven percent. So in effect what happen then is that the commission decided to spread that resultant shortfall.”


But not so good for consumers; 16.87% increase in the cost of electricity stands

Leroy Almendarez

So government maintains its tariff for street lights and will continue to pay fifty-five cents per kilowatt hour and not the sixty-four cents that was presented in the first draft. That nine cents as pointed out by Almendarez will be redistributed. So who will bear the shortfall? All other consumers, Dr. Almendarez explains.

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

“If you take a look at the schedule under the final draft and the schedule under the amendment, you can see the difference. Frist of all, if you notice, for social tariff consumers, the band is still zero to sixty kilowatt hours. So as long as you consume within that band, you are considered a social tariff consumer. That was increased from twenty-eight cents to twenty-nine cents—that’s one change. If you got to residential, you will notice that the zero to fifty under residential was increased from thirty-eight to thirty-nine cents. Fifty-one to two hundred, it was increased from forty-eight cents to forty-nine cents.  And greater than two hundred under residential was increased from fifty-one cents to fifty two cents. The other thing that you will notice that was not included in the schedule under the final draft was that you only had commercial. This commercial one, commercial two reflects a part of those comments that came from B.E.L. And so you find out now that you have commercial one and again look at the bands; pretty similar to residential. If you look at the bands now, the bands is zero to fifty at thirty-nine. Fifty-one to two hundred at forty-nine; greater than two hundred is fifty-two. And then you also have commercial two. Notice that those changes in commercial two which over there in the final draft was commercial if forty-nine to fifty; forty-eight to forty nine and forty-seven; that remains the same. In terms of other material changes, if you notice under industrial one, it doesn’t change and industrial two there is no change. The major difference here is the change from in terms of the cost, the tariff of street lighting; it went back instead of sixty-four cents it’s now back at fifty-five cents. So in essence, the final amendment to the decision; this becomes now the final decision; it becomes effective January first. Unless you are saying well listen then subsidize those variances. It is simply a case where this company, if it continues to operate this way, this variance will increase. And if you don’t take it now, there is an ARP coming in April; we will still have to revisit these. We still have to look at how the dynamics will change with respect to power generation and power supplies from these IPPs and where they purchase power from.”

In case you’re still not sure what this means, let’s recap. The P.U.C. has decided that the sixteen point eight seven percent increase in the cost of electricity stands. Government, which owns B.E.L. and the P.U.C., has basically given itself a gift by declaring that it is exempt from the increase when it comes to streetlights. Consumers aren’t so lucky as we will still have the pay.

Channel 5


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#455353 - 01/16/13 01:21 PM Re: Electricity Rates Going Up By 17% [Re: Marty]
Marty Online   happy

Government Balks At Increased Rate For Streelights; PUC Backpedals; Consumers Feel

At the end of 2012 - we told you that electricity rates would be going up 17%. That hasn't changed but the distribution of the increases has. Here's how it works: as a residential customer your rate went up from 41.6 cents per kilowatt hour to an average of 48 cents per kilowatt hour. Well now, it's going up to 49 cents per kilowatt hour.

And that's because Government objected to the rate increase on street lighting. The PUC had proposed increasing that to 64 cents per kilowatt hour - nine cents more than the 55 cents it had been set at.

But Government - the pro-poor government - wrote to the PUC saying that it would rather reduce the subsidy to social rate customers, the poorest customers - and keep the rate for street lighting at 55 cents. We're restrained from making editorial comments, but that one, that's special...

Today the PUC explained why it agreed with the government:..

Dr. Leroy Almendarez, Dir. Tariffs and Admin. - PUC
"The major difference here is the change from in terms the cost - the tariff for street lighting. It went back instead on 54 cents, it's now back at 55 cents. What the government is saying in their comment is that they did not get any relief when it was reduced by 6.14 cents. The government state in their comment that the additional 9 cents per kilowatt hour would then mean additional expenditure when in fact they say they did not get the relief."

"The PUC considers it to be the right of GOB to reduce any subsidies that it provides through electricity tariffs. As such the PUC decided to maintain existing tariff for street lighting that is 55 cents per kilowatt hour which provides a direct benefit to all consumers of BEL which is true and to spread the result and shortfall in expected revenues, because remember, one of the things you must remember if that is reduced or remains the same as 55 cents then it means that if that 9 cents or that amount is not redistributed then the increase would have not been 16.87% and so therefore for it to still realize the level of revenue that it needed there was a redistribution. In some instances some of the rates in the tariff basket were increase by .01 cent."

That's one cent but it's per kilowatt hour. It doesn't sound like a lot but it increases adds up - to about two million in total form what's called the tariff basket. That's how much the PUC had to get from all the other consumers to compensate for government's objection to the higher rate for street lights.

So bottom line is, everyone gets an increase and now a second one cent increase, but government gets none for street lighting. We asked Almendarez, how is that possible?

Jules Vasquez
"Let's say the government - morally if its pro-poor should take more than its fair share."

Dr. Leroy Almendarez
"Government is paying for the street lights. If you multiply 55 cents by total consumption by these street lights and see how much it cost the government. I am not speaking on behalf of the government, the government is not here to defend itself but we are just saying that if those things are on from 6 in the evening to six the following morning - that's a lot of consumption."

Jules Vasquez
"It not the government has the responsibility to bear its fair share or waiver of the burden. I am saying every rate is increased expect the government."

Dr. Leroy Almendarez
"I fully agree with you that a government has the responsibility to ensure that the social wellbeing of its citizens is taken care of. GOB did not shirk its right to pay for street light, it did not do that. It did not shirk that responsibility and I think it's important and here I am not speaking on behalf of the government but you are saying - the commission. The commission made that consideration. One of the things we have to remember, now it will sound like I am speaking on behalf of the government and I am not, there are other obligations. You have to relocate so much more expenditure in order to meet the 9 cents per kilowatt hour. It's not true? You'd have to do that Jules."

Jules Vasquez
"That is their business. That is not my business. That means no new SUV this year."

Dr. Leroy Almendarez
"I think whenever you are in a press conference with the PM again - that's the person to ask."

And, to be sure, we will ask him in due course, but for the time being, Almendarez says the best you can do is make like a monk, and conserve:..

Dr. Leroy Almendarez
"Let me just add that it's important that we encourage consumers to reduce their cost through conservation - that's important. You can reduce your cost, if you consume zero power; you don't pay anything unless there is a base charge. If you reduce your consumption then you reduce your power."

The new rates went into effect January first. They hold in force until June 30th when the decision of an annual review will go into effect.

Channel 7


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#455624 - 01/19/13 01:51 PM Re: Electricity Rates Going Up By 17% [Re: Marty]
Marty Online   happy

PM: GOB Can't Afford Electricity Rate Increase

Earlier this week, we told you about electricity rates which went up at the beginning of this month. The PUC held a press conference to say it was going up by a cent more for everything except the street lights.

That's because the rate for street lights reverted to 55 cents per kilowatt hour, where it was before the increase came into effect. The bottom line is that everyone will pay more, except for the government on those street lights!

Today the Prime Minister explained that they just can't afford it:..

Prime Minister Dean Barrow
"Let's be clear on what's involved here - government was always paying 55 cents per kilowatt hour for the street lighting which was hugely more than the rate for the rest of consumers was at the time when those rates was lowered and I think the ordinary consumer by and large in terms of the rate and tariff went down to 41-42 cents or whatever it was. Government remained at 55 cents. I don't think that fair - I think its discriminatory and then when there was a reduction government didn't get the benefit of any reduction. Now that there has to be an increased government will be increased from 55-64 I don't think so. Ultimately that street lighting bill is a bill we assume on behalf of the public - it represents millions of dollars annually for our budget. If we are going to increased it so that we are going to go up by another 2 or 3 million dollars a year - I have to factor that into the larger budget mix. I have said that I am determined not to raised taxes and so anything such as an unprogram huge increased in government street lighting bill that might oblige me then to have to go back to people by way of a tax increase I will fight."

The increase would have cost government roughly two million dollars - which will now have to be recouped from consumers.

Channel 7


ELECTRICITY RATES GO UP FOR CITIZENS, BUT NOT FOR STREET LIGHTING

It was made public in 2012 that electricity rates would increase by 16.87 percent for the New Year. The new rates went into effect on January 1, 2013. What was not made known to the public until this week was the distribution of the increased rates.

The Belize Electricity Limited (BEL) said that the increase was necessary to recover additional cost of power for 2012 and to cover increases in the cost of power for the period of January 1 to June 30, 2013.

It was the Public Utilities Commission (PUC), however, which issued a press release that outlined the way the increase would be distributed. What seemed to some to have been unfair in the distribution is the fact that the rate for the street lights, paid for by Government, did not increase, but it did increase for consumers.

The PUC had proposed that the rate for street lights be increased by nine cents from 55 cents to 64 cents per kilowatt hour, but the government rejected that proposal and requested that the increase be placed on the rates for other customers.

The Mean Electricity Rate (MER) has increased from 41.81 cents to 48.86 cents per kilowatt hour for residential customers.

According to reports by the media, Dr. Leroy Almendarez, Director of Tariffs and Administration for the PUC, said that the reason the government objected to an increase in street light rates is because they need the relief in expenditure. The government’s claim is that they did not receive any relief when rates were reduced before.

Because the GOB decided it will not take up the increase in cost of power for street lights, the decision was made to subsidize the cost to social rate customers. The PUC is a body appointed by the government, so the approval for the increase was considered by the PUC as the GOB’s right to reduce any subsidies that it provides through electricity tariffs. That means that the existing tariff for street lighting that is 55 cents per kilowatt hour, will remain unchanged.

Almendarez said that with the tariff for street lighting remaining at 55 cents per kilowatt hour, there was a need to redistribute rates in order to realize the revenue that BEL still needed, thus leading to the 16.87 percent increase that they calculated would be necessary.

No resident can escape the increase in their bill, but customers are advised to avoid a massive increase in their electricity bill by trying to be conservative in their consumption of power. How that will be done is all dependent on how residents use their electricity, Almendarez said.

Amandala


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