Will electricity go up in 2013? A definite maybe

Posted By: Marty

Will electricity go up in 2013? A definite maybe - 12/15/12 02:39 PM

Belize Electricity Limited (B.E.L.) is saying that the acquisition cost of electricity is going up but will it be reflected in your light bills? To answer that question, we spoke to B.E.L. today. They explained that currently the hydro dams are below operational levels and there is also a weak production of electricity from BELCOGEN since bagasse supplies have run out. The situation is compounded because the cost of purchasing electricity from Mexico has also increased.  Though B.E.L. was operating on a reduction plan to return thirty million dollars owed to consumers over the next four years, the Senior Manager for the company now says, that the increased cost of supply has just about covered the monies owed to consumers in one year, rather than the forecasted four years.

Jose Sanchez

“People want to know; will their electricity bills go up?”

Ernesto Gomez, Senior Manager, Energy Supply

“I cannot tell you that. The reason is because that is an answer that the P.U.C. should be the one addressing.  All that we are doing is that we are informing the public through the press release that we are complying with the law which requires that we submit our data of our actual energy consumption so that the P.U.C. can compare it with what they approved on the last tariff review that they did. Now, they may or may not look at an adjustment to the approved tariff. That is their prerogative so we are not in any way making any requests to the P.U.C.”

Jose Sanchez

“Mister Gomez, there has been an increase to the acquisition cost of power for B.E.L. What are those things that caused the increase?”

Ernesto Gomez

Ernesto Gomez

“That’s a good question. The Mexican power started to rise; creep up slowly throughout the months basically because they are suffering from the same problem like us—they don’t have any water—and they are suffering some natural gas problems. Natural gas is their cheapest source of energy. So by having problems with that, they have to use more expensive energies such as diesel and heavy fuel oils. So that caused the Mexican price to creep up. But we were handling pretty well with the compensating use of water and bagasse from BELCOGEN up to July when the rainy season should have started, but never did. As a result we were unable to get the planned volume of energy from the hydros and from BELCOGEN and we were forced to replace it with the higher cost of power from Mexico. So as a result, the average price that went into our grid was much higher than what we had planned.”

Jose Sanchez

“B.E.L. does owe consumers about thirty million dollars. How does that thirty million dollars factor into what you are applying for in the proposed adjustments?”

Ernesto Gomez

“Well that’s going to work out very well on behalf of the consumers. What happen is that on the full tariff review that the P.U.C. asked us to implement the first of February, they calculated that from 2008 to that point that there was still a balance inside the rate and spread it in four years—that B.E.L. would pay it back little by little, discounting a little bit on the rate, over four years. But since we have now a difference, a large difference, between the actual cost of power and what the P.U.C. had regulated as to be the cost of power, we are asking the P.U.C. to consider that as if we had paid that correction up front rather than spreading it in four years; which means that then the P.U.C. would not need to make a correction for B.E.L. to continue recovering that. It will take away that part of the bill as such.”

Jose Sanchez

“This will last for about a year?”

Ernesto Gomez

“Well, if you consider it from the first of February to present, it’s eleven months more or less—eleven to ten months that I could say we would have fully paid back that money to the public.”

So it’s up to the Public Utilities Commission to decide whether or not it accepts B.E.L.’s submission that the thirty million dollars has dried up and if consumers will get licked with a rate increase in 2013.

Channel 5

Posted By: Marty

Re: Will electricity go up in 2013? A definite maybe - 12/17/12 01:57 PM

Will 2013 Bring An Increase In Your Electricity Bill?

Life hard in Belize and even BEL is feeling the pinch of the financial crisis and the elevated cost of electricity seems to be the main problem. For the past year rainfall has reduced and consequently enough Hydro power is not being produced. BELCOGEN has not been producing anywhere close to capacity and Mexico has been selling BEL energy power for almost 43 cents per kilowatt hour - which is about the same amount consumers pay per kilowatt hour. This means that BEL is basically non profitable.

Viewers might recall that in a release sent out in July of this year, the company revealed that their cost of power has increased by more than 30% since the rate reduction of January 2012.  So, are consumers on the brink of paying more for energy consumption? In an interview with Channel Seven last night BEL Representative Ernesto Gomez said that the decision to increase the rate of electricity lies in the hands of the Public Utilities Commission who is well aware of the financial constraints BEL is facing.

Ernesto Gomez - Sr. Manager of Energy & Supply, BEL

"Under the law, the cost of power that BEL purchases for its suppliers, it's just a pass through to the customers. So, the expensive of the cost of power, if you remove that from the rate, BEL has just a small margin to operate on, like 30%. So, if the cost of power rises, it takes away from our everyday cash to be able to operate. BEL has used all its resource to be able to easily keep the lights on for the customers. And as a result, the customers do not even know that this thing is occurring, but as a result, we are committed by law to report these changes to the Public Utilities Commission for them to look at it. And they may or may not make decision. That's their prerogative. In January 25 of this year, BEL put out a press release to the public, just after they had given the initial decision for the full tariff, the PUC had given that. And, we had studied the decision and the rates, and we realized and decided that we can easily operate efficiently with those rates, if the cost of power would remain at the price that it was in January of this year. But since the price of power did not stay at that level, we are now obligated by law to make a submission to the PUC that would report them our actual cost power and our forecasted cost of power from the end of June, which tariff review period. That's what we're submitting, only that. The PUC will take that information, and they may decide if they will do any adjustments to the decision that they made in February of this year, or they may chose to go another direction, but at this moment, our submission is basically the submission of data, as required by law. At this moment that we have done our submission to the PUC, we have to be careful not to be scene suggesting to the PUC any decision that we would want them to take. As a result, I would not want to suggest anything to the media. I prefer the PUC keep their independence, and make their decision without any influence from us, the licensee. We believe that the problem has done a strain on our finances, and we have gone ahead sought short term financing, as you have seen, with debentures and what-have-you. So, we are prepared to make sure that the customer still has electricity continuously. That is not a problem. Well, at this moment, with the fuel prices at this level, if you do the analysis now, obviously, it's unsustainable. But, you cannot do it at one moment in time. The PUC has to be looking at it in periods of 4 or 5 years. That's why they call it full tariff review. Like I said before, and forgive me for insisting, because we did our submission to the PUC on December 10, the PUC takes 15 days to deliberate and do their own technical stuff with us supporting them with whatever information they want. During that period of time, we cannot by law say anything to the public that would influence - or that would look like we're influencing the PUC in a decision. So, suggesting a rate, or suggesting an increase or a bottom line, I would not be able to do it. After the PUC put out its first decision, which will be around December 27 or 28, then I could answer you on all those questions, without a problem. We're trying to encourage and promote the public for energy conservation. Whatever way the rates go or don't go, we don't want the public to pay any more than they need to."

While it seems that there will be no increase in the near future it does not necessarily mean that one is not in the horizon. 


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