The Public Utilities Commission (PUC) announced on Wednesday January 7 that the price of electricity will effectively be going down.
In speaking with PUC chairman John Avery, he explains that since the price of fuel has been going down in the international market, the cost of electricity being provided to BEL has been going down from Mexico. That has triggered the new rate setting methodology which was introduced by the PUC on September 1. In that, provisions are made to adjust the price consumers pay for electricity every time there is a fluctuation in the price of power that BEL purchases.
That has now translated to a drop of 5.4 cents in the price of electricity. Between July and December of last year the Reference Price of Power (RPP) stood at 31.2 cents while the Value Added for Delivery (VAD) stood at 13.5 cents. The new RPP set for January to June of 2009 is 23.5 cents while the VAD has gone up to 15.8 cents.
The Rate Stabilization Account Recovery Rate remains at 8 cents while other corrections made also remain at 8.6 cents. All these added together from July to December in 2008 amounted to 44.1 cents as the Mean Electricity Rate. Now those will add up to 38.7 cents representing a 5.4 cent drop in cost of electricity to consumers per kilowatt hour. Overall that represents a 12 percent decrease in the cost of power to consumers and represents a welcomed relief to users of electricity.
Avery explains that as at the end of November BEL had been overcharging consumers to the tune of some 12.839 million dollars and by the end of December that figure could go up to somewhere around 17 million dollars. Now the rates are being adjusted to reflect the decrease in the cost of power and they are being passed on to the consumers. Avery adds that under the new rate setting methodology every six months the PUC will be setting a reference price of power.
This is done by looking at BEL’s forecast for power purchases which for now only fluctuates because of the price of power which is bought from Mexico. For now the cost of electricity is not expected to go up very much; however, in the event that it does, through power purchased from Mexico, provisions have already been put in place to buffer the increase. Avery concludes that in March there will be another review of the cost of power and if there is an increase or decrease in the cost of power it will be passed on to consumers.