Fortis C.E.O. unhappy with new electricity rates
Later in the newscast we’ll have a report of a cargo vessel that beached in the area of Southern Long Caye earlier today. But first, this story on the financial woes of the Belize Electricity Limited.
That utility company has been mum on last week’s decision by the Public Utilities Commission to amend its 2008 final decision, citing the fact that the matter is before the courts… but its parent company, Fortis Incorporated, is not shying away from the subject. Guest on Channel Five’s Open Your Eyes was Fortis President and C.E.O. Stanley Marshall, who held back no punches in discussing the utility’s often strained relationship with the P.U.C. and government. For Marshall, contrary to what P.U.C. Chair John Avery believes, the increased rate of return they received in the amendment is nothing for the company to be happy about.
Stanley Marshall, President, Fortis Inc.
“Suppose your employer is paying you twelve dollars an hour when you know the market is fifteen. Your employer comes in one day and said, okay, you are earning too much money, it’s no longer twelve dollars an hour, its eight dollars an hour. You’re not very happy with that. A year later, with no consultation with you, no debate, no process, he comes back oh, it’s going to be ten dollars an hour again, but you are not going to get paid for the first hour or the last hour. Are you going to be happy? What do you do? You sue and a lawsuit won’t resolve this issue, it will only determine the extent to which the parties barrier the damage. This is not going to be resolved in the courts, but the only way we can defend ourselves here is through a legal process. The P.U.C. is being totally arbitrary. The decision that came out last week, there was no due process, we were not consulted, there is no hearing, no submissions; it was pulled out of the air and it was dictated to us. So am I happy when it is going from ten percent to twelve percent when they said, yes, but you can’t earn on this, that, eliminate this or that. This is a total fiasco. One of the general parameters is it has to be a rate of return sufficient to ensure that the company remains viable, it has a strong financial position that it can borrow at the bank. Today B.E.L. cannot borrow at the bank, it has defaulted on all its loans, the banks have called its debts, so whatever primer you use, I can tell you that’s it’s not met with B.E.L. The company is in financial straits. So we’re not talking about whether it should be fifteen percent or sixteen percent or fourteen percent or thirteen percent; we are talking about a fundamental breach of the concept.”
“We’ve never earned a rate of return in Belize that, in my view, compensates for the risk we’ve taken. We’ve never earned that and last year the regulator said we were earning too much. Of course looking back last year because of all the changes they made we actually lost money, we lost over ten million dollars last year. However you argue what a reasonable rate of return is, a loss is not a reasonable rate of return quite frankly. And let me say that if I had known ten years ago what I know now, I’d have never put any money in this country.”
According to Marshall, the commitments government made to them ten years ago when they bought into B.E.L. have not been fulfilled and that is what is contributing to the major problems that the utility is experiencing. And while it’s making him question his decision to invest, Marshall says he is nonetheless hopeful that the situation will be resolved… eventually.
Stanley Marshall
“We are the biggest investor in this country. Our investment is now approaching a half a billion dollars Belize, that’s an awful lot of money. If we had invested, you wouldn’t have had those dams for flood control, for lower electricity, you wouldn’t have had the expansion of electrical systems in B.E.L. So we are the largest investor and that has been very important to this country. And I am telling the truth, if someone were to come today and say Mr. Marshall, here’s a half a billion dollars, here’s your money back, take it and go home, I would say thank you very much. I would feel very bad for the people at B.E.L., I would feel very bad for the people of Belize, because it’s not the right thing but when you are treated this way, you simply have no alternative. I mean, it’s not my money, I am investing other people’s money, people like you; their pension funds, their personal investments. I have a responsibility as trustee of those funds to invest them wisely. Why should I invest my money in Belize and lose it when I can invest it in the United States and Canada and never lose my money? We’re not asking for anything unusual, I’m just asking that the commitments that were made be observed and those commitments were basically to be reasonable, to follow normal methodologies for determine rates of return and so hopefully it will be resolved, I think it will be resolved.”
