Brace For A Bigger Light Bill: PUC Approves BEL Increase

2 weeks ago, we told you how BEL made a formal request for the PUC to approve an increase in electricity rates. They were asking for the rates to go up from 39.2 cents per kilowatt hour to 41.5 cents per kilowatt hour.

Opposition Leader John Briceno put the government on blast for it at the last House Meeting, and he reminded the general public that BEL got a rate increase only 6 months ago.

Well, the PUC has reviewed BEL's proposal, and the commission has done its own investigation into BEL's numbers.  And the news tonight is that it has approved the increase, and tacked on a little more.

The PUC announced that it has approved a 6.87% increase in electricity rates, allowing BEL to collect 42 cents per kilowatt hour - half a cent more than the utility had asked for.

According to the PUC, the problem is Mexico.  Almost half of the total electricity that BEL uses comes from Mexico, and right now prices in that country are trending up.

This afternoon, PUC Chairman John Avery hosted a press conference to explain that volatility in the Mexican national power grid have led to a higher cost of power in Belize:

John Avery - Chairman, PUC
"On December 10th, BEL made a submission to the PUC, asking the PUC to change the tariffs for the period January 1st, 2019 to June 30th, 2019, based on excess cost of power for the last 18 months."

"We came up with a rate of about 42 cents, which is of course, half cent higher than BEL requested. However, as I pointed out, there were some errors in BEL's submissions. This excess cost of power basically can mostly be attributed to higher prices from Mexico. There are times when - during the last 18 months that Mexican power has been higher than some of our most expensive local sources, barring fossil fuel generation. And even though at times of the year it is lower than the sources in Belize, the point is that the prices that we paid are still higher than what was projected during the last rate reviews."

"Because we buy power from the Peninsula area of Mexico, that area has seen increases 4 or 5 times as high as the other areas in Mexico. It's not really related to the cost of power itself, but more the deficiencies in their transmission system, and so, there are penalties for the transferred loss of huge amounts of power in the transmission system for the peninsula area of Mexico. Unfortunately, that is the area we're connected to, and so, those increase in costs, we also see them."

Ambrose Tillett -  Director of Electricity, PUC
"These increases that were proving is cost that has already incurred and by law we are supposed to allow them to recover that cost."

John Avery
"The thing is that is the cost of power at the time when people were consuming the power BEL had to use its own resources to pay for it because it wasn't recovering that through the rates. So the thing is BEL in effect has been subsidizing consumers for the last 18 months. It is simply a time for consumers to repay BEL."

So, the PUC says that they want to urge BEL to seek local, alternative sources of power, so that Belize can depend less on Mexico's power grid, and therefore, buy less electricity from our neighbors to the north. 

Here's how Avery explained that it will be made clear to BEL that it must take certain steps to decrease the cost of power:

John Avery
"The PUC intends to advise BEL in writing that if measures aren't put in place in a satisfactory timeframe to mitigate some of these extra costs that we've been paying, consumers won't be expected to bear that cost. The commission intends by the 15th of January it is something that we've been working on for some time; however because of the conditions of BEL license, these type of things the commission don't normally unilaterally do. We usually do these things in consultation with BEL because they do have a say in how they operate their business. The commission is not supposed to manage BEL, however we had hoped in discussions with BEL that before the end of this year we'd have launched an auction for distributed solar generation starting first with the hospitality sector, the resorts and hotels in Belize as a request from the government that we start in that area."

"We intend to announce an auction for anywhere between 2 and 3 megawatts of solar power to be added before the end of 2019. There are still details to be worked out but we intend to invite expressions of interest and we're hoping that before the end of year we can add 2 to 2 megawatts of solar power from distributed generation starting with the hospitality sector. If they don't take up the full amount of capacity we're asking for then the invitation will be extended to commercial and residential consumers too. So we intend to do that as a first step. The other thing we intend to do at the last request for proposals we had, BAPCO had been selected to install utility grade solar in the country. That has not been executed as yet at the request of BEL, they had different consultants coming on and doing certain studies so that they know where best to add the capacity and how much to add in each location. However were not satisfied with the progress being made there and so the commission intends to become very involved in the discussions between the two parties."

And while that is what the PCC is saying to BEL, the power company's message to him is almost the same!  In its last release, BEL said it will, quote "recommend…the launch of a Request for Proposals  in Electricity Generation from competitively priced sources of renewable energy."  

Back to the PUC decision, it is the final draft from the PUC, and members of the general public have until January 5th to make written comments. The PUC must make the amendment final by January 10th, and provided that there are no substantial objections from the public, the rate increase becomes effective on January 1st, 2019.

Channel 7