P.U.C. defends its decision on electricity rates
If you’ve already received your January electricity bill, you have no doubt felt the pinch of the rate increases granted to Belize Electricity Limited effective the first of the month. The new prices are the result of what’s called TERP, a Threshold Event Review Proceeding. That mechanism kicked into effect late last year when the rate stabilization account, designed to buffer the company from fluctuating fuel prices, reached an all time high. The regulatory body governing the electricity sector, the Public Utilities Commission, would later approve an average five point one cent increase per kilowatt hour. However, two separate entities, the Belize Institute of Environmental Law and Policy (BELPO) and the United Democratic Party, submitted applications calling for a review and rollback of the price hike. Today at a press conference, the P.U.C. dismissed both those requests, stating that it faithfully followed the law for the rate changes and that the application documents were long on rhetoric and short on facts. This morning Chairman of the P.U.C., Dr. Gilbert Canton, maintained that everything is being done to keep prices down.
Dr. Gilbert Canton, Chair, Public Utilities Commission
?It?s not a process that starts on the application, but we have actually over the years been getting monthly reports on all these things from B.E.L. So we keep ourselves informed on an up-to-date basis on what is happening with B.E.L. When the application comes in, we go into a little bit more of a detailed analysis to actually verify the numbers that have been submitted. We did that, we are confident that we?ve done that in a diligent fashion, we are confident that the numbers submitted are accurate and valid, so we are comfortable with the decision that we?ve made.?
Ambrose Tillett, U.D.P. Senator
?When you look at the situation with the gas turbine at mile eight, B.E.L. came and said, ?This is the cheapest way to go.? No competition, they just approved it. When it came to the Chalillo dam, they didn?t go out for bids, they just seh, ?bwai this dah the cheapest thing,? and Dr. Canton they went with it. And that is inherently the flaw in the process, your generating cost is going to continue to rise because B.E.L. and the Commission have basically colluded to make sure that whenever B.E.L. has a little project they want to do, it gets done, even if it costs a lot of money. And they never want to face competition because they are afraid that the public understands that their generation costs for B.E.L. and for BECOL is higher than the rest of the people; and that?s really where we are.?
Janelle Chanona
?As a country, because we are only serviced by one company, are consumers held at ransom or do you really think there is an environment where you can promote competition in a meaningful way??
Dr. Gilbert Canton
?It?s difficult, and that?s the role of the regulator because as you said, in this country we have a monopoly provider in terms of distribution. What we are trying to do is promote competition in generation so that we can reduce the cost of generation to B.E.L. and onwards to the consumer.?
?We recognise that these rate increases are extremely difficult and I can understand the concerns that consumers have, why rates keep going up, going up. It is something that at this point, we are trying very much to make sure that there are fair and reasonable increases and that there is no gouging as something that is being alleged in regard to that. That is our duty and we take it very, very seriously.?
As for when prices might change, we understand tonight that in March Belize Electricity Limited will start submitting documents to the P.U.C. for the annual review proceedings. Any new rates approved then would take effect in July 2006.
One of the factors the Public Utilities Commission was forced to take into consideration on the new rate increase was the fact that the contract with B.E.L.’s Mexican supplier, Commission Federal de Electricidad, will expire in August of this year. Canton contends plans are in the pipeline to deal with that vulnerability in the system.
Dr. Gilbert Canton
?We have the offer that C.F.E. has made on the table because that offer was made and compared against the bids that came in for the generation, to see if there is anything that could replace it. So we will be having a C.F.E. offer and we will also have another plant come in to help provide some more energy security and reliability within the country.?
Janelle Chanona
?Talk to us about those bids that have come in to offset the C.F.E.??
Dr. Gilbert Canton
?What we did is basically, we know that C.F.E. would be, that contract would expire in August of 2006. So we said that instead of just having that dependency on just one offer coming back to us and then having that re-negotiated we asked B.E.L. to go ahead and open this thing up for competition to see if there were any other entities out there that can provide power at a competitive rate. So we did that, and then what we did is we then?we had about six bids that came in, couple international bids. We then looked that those bids, evaluated those against established evaluation criteria, this was not just arbitrary, and then we ranked them and then we compared the top rank bid with the C.F.E. offer and then we made a decision on how we will move forward with that. So we have given B.E.L. the nod to go ahead and start negotiations to see what the actual numbers will be. ?
Tonight we are told that the front runners in the bidding for additional energy are proposals calling for the burning of heavy petroleum fuels.
