GOB Tells PUC To Wheel & Come Again on BEL Decision
Last night, we told you about the latest decision from the Public Utilities Commission to approve an increase in electricity rates. Well, tonight, the Barrow Administration is rejecting that PUC decision, and asking the PUC not to consider any increase for at least the next 6 months.
As we reported, BEL requested that the mean electricity rate be increased from 39.2 cents per kilowatt hour to 41.5 cents per kilowatt hour. The PUC went a step further. It gave them that and some "brata" when it approved an increase of 42 cents per kilowatt hour.
Well, the government sent out a rare press release today - publicly disagreeing with its own government appointed PUC. It says, quote, "â€¦ (GOB) expresses strong objections to the recent decision by the â€¦(PUC) to approve the request fromâ€¦(BEL) for an increase in electricity rate at a half cent higher than what BEL requested." End quote.
The release continues, quote, "GOB recognizes and respects the independence of the PUC, but as the largest consumer of electricity in Belize, the GOB does not take lightly any increase in rates. While the PUC has cited errors in BEL's calculations, GOB is satisfied and accepts the submission made by BEL for an increase in rate to 41.5 cents only. GOB, therefore, strongly encourages the PUC to reconsider its decision and approve the increase of 41.5 cents and not 42 cents per kilowatt hour."
The Government release ends by noting that it will certainly put an official objection in writing to the PUC to trigger a review of the PUC's decision.
And while this release quarrels with the PUC for the half a cent bonus that the regulator approved to BEL, we've seen communication from the Ministry of Energy and Public Utilities which takes it even further: it shows that the Government is pushing for a postponement of the rate increase entirely.
A letter from CEO Peter Allen to PUC Chairman John Avery says, quote,
"The Ministryâ€¦ is requesting that the Commission reconsider and re-evaluate the submission made by Belize Electricity Limited and the draft decision of the Commission.
...any potential losses to BELâ€¦should be evaluated at the subsequent ARP." End quote.
So, the Government makes it clear that they want BEL to continue absorbing that cost of power for the next few months until the Annual Review Process in June. And we note that Prime Minister Dena Barrow is in charge of the Ministry if Energy and Public Utilities.
Yesterday at the PUC press conference, we brought up the rising cost of living, and the accompanying concern that citizens have about having to paying a bigger electricity bill.
The PUC Chairman said that while this rate increase puts the cost per kilowatt hour much higher than it had been recently, it is not as high as previous years:
John Avery - Chairman, PUC
"Unless we forget, this current rate is lower than what it was 10 years ago, and in fact, in the last 5 years, the country of Belize has seen some of the lowest rates in its history. So, we had a period of good, and right now, we're going through a little period of bad. But, yeah, we will take steps to improve it."
We've since gone back into our archives, and we've confirmed what the Chairman said.
This graph illustrates that in January 2013, the electricity rate was at 49 cents
per kilowatt hour. 1 year later, it decreased by 2 cents, and then by January 2015, it had dropped by an additional 2 cents to 41 cents per kilowatt hour.
6 months later, the mean electricity rate went down to 35 cents per kilowatt hour, its lowest in recent history.
By June 2016, BEL began requesting increases, and the PUC approved one such request, bringing the electricity rate up to 36.9 cents. Things remained stable for a little over a year and a half, despite multiple requests from BEL for an increase. By June of this year, the rate went up to 39.2 cents per kilowatt hour, and now, there is this controversial decision from the PUC to increase it to 42 cents per kilowatt hour, only 6 months later.
Of course, this is in addition to the GST that the Government tacked on to the electricity bill. Back in April of last year, the Government changed the tax regime on electricity so that if your bill is over $100 monthly, you have to pay 12.5% tax on it. With this latest proposed rate increase, customers teetering near that $100 threshold will now be hit with that additional GST. We asked the PUC Chairman about that yesterday:
John Avery - Chairman, PUC
"The best advice we could give to consumers, particularly those who may be right on the edge is to try to conserve as much power as possible. I mean conservation is always an avenue open to consumers. In fact, it is advisable. There is no sense in paying for power that you don't need. So, those customers, the best advise you can give them, is to try to conserve as much power as possible and keep your bills low. That would actually help the situation, particularly during the day when Mexican prices might be highest. If people would consume less power, then that's less high-end cost power that BEL has to purchase. So, energy efficiency is always advisable. It is perhaps the easiest way to deal with your bills, as opposed to trying to get a cheaper source."
We'll keep following the story to see how this dispute plays out.