B.E.L. seeks 14% rate hike

With much of the nation’s energy tied up in a public debate over rising taxes, falling public expenditures and their impact on Belizean life, today’s announcement could not have come at a worse time. According to releases from Belize Electricity Limited and the Public Utilities Commission, B.E.L. has filed documents with the P.U.C. applying for a fourteen percent increase in electricity rates. The details will come later, as part of the Full Tariff Review Proceeding covering the four year period from July first 2005 to June thirtieth 2009. And while the P.U.C. will not necessarily give B.E.L. everything it wants, just the thought of bigger light bills has many Belizeans ready to pull the plug. This afternoon we asked B.E.L.’s C.E.O., Lynn Young, to say it ain’t so.

Lynn Young, C.E.O., Belize Electricity Limited
?It?s not something that we really like or wanted to do. I think you know we have a history of keeping rates low, and in fact we are probably the only utility that has reduced rates over the last ten, fifteen years. But a lot of things have happened, Stewart, oil prices five years ago was eleven dollars a barrel, the last price we got was fifty-one dollars a barrel and oil accounts for about sixty percent of our cost. So it?s either oil, or like C.F.E, their prices are also adjusted based on our prices. Four years ago, C.F.E.?s rates since then has doubled on us. So for the last four or five years, we have been doing all sorts of things not to have to ask for an increase in rates until last year. We felt that with oil prices where it was we needed to get some kind of increase to stave off future adjustments. Of course, the P.U.C. looked at it and said that there was no scope within the existing laws for them to consider it and they would consider it at this time. But it has been building up, it?s been building up over the last few years and we have been holding it down, doing lots of things to try to keep it down and it?s just reached the point where we have to try to make some adjustments now.?

Stewart Krohn
?The whole focus over the last few years though Lynn has been Chalillo, Chalillo: escape from the slavery of high petroleum prices to go to low cost, stable, hydropower. Now the rate increase that you?re applying for is over a five year period if I?m not mistaken.?

Lynn Young
?Yes, we?re asking for fifteen percent increase, but wait it?s a four year period. I don?t know how the P.U.C. is going to approach it. We?re asking for fourteen now and over the next four years then there wouldn?t be any…there?d be maybe minor adjustments up or down depending how the costs of power–how oil prices move.?

Stewart Krohn
?But in the future years, presumably maybe starting the year from now or less when Chalillo comes on stream, isn?t that suppose to drive your cost down??

Lynn Young
?It will help. One of the problems we are faced with right now is that C.F.E. has given us notice that they want to terminate the contact next year. We are negotiating with them to try to extend the contract, but I suspect that if we do get an extension it will be at higher rates. And that is a real concern for us, so that even if we get, even when we get Chalillo online and we?re trying to do other things, we?ve signed a contract with BELCOGEN for bagasse power, which again is not as oil dependent, we still have other things lurking there, you know, like the C.F.E. issue and the fact that we still have to generate some peaking power with our diesel. So the plain truth is that the outlook is not good for energy prices. And not only in Belize, of course, I mean it?s all over the world. We see what?s happening at the gas pumps, we see what?s happening with taxi fares, with air fares. So the high oil prices are just driving cost up throughout the economy and it?s affecting all of us.?

Stewart Krohn
?Undoubtedly over the next few weeks and months, in conjunction with your application to the P.U.C., this whole question of electricity rates will be debated in much greater detail.?

Lynn Young
?Yeah, I expect so.?

Stewart Krohn
?But looking at it from the public?s point of view, the already hard-pressed consumer that is faced with this, what is your message to that person out there??

Lynn Young
?Well, we will continue to do all we can to try to manage this, these oil prices, to try to manage energy costs. We have done a few things so far. I think it?s public knowledge that we have cut some staff; we?ve cut about thirty percent staff over the last four years, we?ve gotten major shareholders to not take their dividends out of the company, and we have cut our operating cost by about five, six percent over the last four years. So, we have been trying to do some things. What we are doing also, we are putting out some advertisements and pamphlets giving customers some tips on how they can try to manage their energy cost by little things that you can do to cut back on your electricity bills. But the biggest thing for us right now is this negotiation with C.F.E., trying to get Chalillo done, moving on with the next hydro-development. Those are the things that in the long-term will help us to stabilize the rates. But of course, you could get lucky and oil prices could start coming back down too. But it?s just going to have to be an all around effort looking at everything to try to maintain electricity prices.?

As part of the tariff review interested parties will have the opportunity to comment at a public meeting to be held on Saturday March twelfth at two in the afternoon at the Bliss Centre in Belize City. Copies of the company’s filing should be available at B.E.L. offices countrywide.