B.E.L. wins round one against Public Utilities Commission
Lynn Young
The Court of appeal concluded its sitting today, but before it did the justices delivered a landmark decision just before noon. The Court handed down a ruling that involved one of its own justices, newly appointed Denys Barrow. The appeal was brought by the Belize Electricity Limited against the Public Utilities Commission. The utility company had appealed a ruling handed down by the same court on October twenty-seventh of 2009 when it affirmed a previous decision by the Chief Justice. But the Appeals Court judges included Justice Barrow and therein lay the problem for B.E.L. The company felt that because Justice Barrow is the father of PUC Commissioner, Kimano Barrow, it gave rise to a “reasonable apprehension or suspicion that Justice Barrow lacked impartiality” when the ruling was made. And today, in a short decision, the Justices who heard the appeal, Justices Manuel Sosa, Boyd Carey and Elliott Mottley, agreed with B.E.L.’s argument.
Lynn Young, CEO, B.E.L.
“There was an appearance of bias that the case should be reheard so we are going to go back now and try to make our point to the Appeals Court in front to of a court that doesn’t have that appearance of bias and we hope we get a better result this time and quite frankly, I think that it’s a situation that I think personally that the government really needs to set the regulatory environment because the PUC is just there to monitor it and to make sure that everything goes in accordance with the framework that the government sets.”
B.E.L. challenged the PUC in court when it got an order from the PUC in 2007 to enter into a contract with a group of investors to purchase power. B.E.L.’s position is that the contract would not have done the country good, considering that fuel prices were on the rise. In 2008 the PUC raised issue when B.E.L. provided forty plus million dollars to facilitate BECOL in the construction of the Chalillo Dam. That was because the PUC thought that it was a conflict of interest for B.E.L. to invest in its parent company BECOL. Lynn Young, CEO of B.E.L. says that the PUC’s role should not be to impose and that the Chalillo Dam was a legitimate investment. He spoke of this and B.E.L.’s position on the PUC’s role as a result of the hydro dam.
Lynn Young, CEO, B.E.L.
“The government at the time, the PUC and BEL and BECOL had sat down and negotiated an agreement where initially the government was supposed to build Chalillo and then instead BECOL took on the responsibility of building Chalillo. Part of the arrangement was that BEL would pay for the transmission line and separate it out of the cost of power. The net result of that is that we now have the hydro plants which are producing power. Last year alone, for example, we saved over fifteen million dollars as compared to if we had gotten into one of these oil fuelled plants. Since Chalillo has been in place, if it hadn’t been in place, we would have been having to buy more power from Mexico and it was very expensive and we would have had to be generating with heavy fuel which, as it stands right now today, if we had been buying power from that plant, the cost of power from that plant would be somewhere around thirty/thirty-five cents per kilowatt hour. It’s almost as expensive as what we are charging customers so it would have been a serious problem. So all in all, that transaction that took place, it’s not right to just take the one part of the transaction and say oh BEL paid forty-two million dollars or whatever—I think the forty-two included interest because we had owed them for a while. But it is not right to take just that one transaction and pinpoint that when in fact customers have saved over—the last time we checked it was close to sixty million dollars as a result of the hydro and those savings will continue. It involves whether or not the PUC can dictate to us to enter into contracts and to dictate the conditions of the contracts. We feel very strongly about it so we are glad we have a second opportunity with a panel of judges where there is no appearance of bias.”
Marion Ali
“You use the term dictate to you but the PUC’s role is really to regulate all utility companies within the country in terms of contracts they sign, in terms of prices they charge and so forth. Don’t you agree with that?”
Lynn Young
“Yes, but the way they do it if you are in charge of overseeing something, different parties get involved in contracts and you are in charge of overseeing it and you were to dictate to one party to get into another contract but then you are the same person that you have to go back to for approvals and if something is wrong you are the same person that you have to go to, to try and get it fixed then it’s a very difficult situation. We know for a fact in other regulatory environments it doesn’t work that way. The parties would negotiate their contracts and then they would present it to the PUC for approval. It doesn’t happen that the PUC gets involved in negotiating the contracts when they are the ones that have to approve the rates, etcetera.”
The ruling means that a date will be set for the appeal to be retried by a new panel of Appeals Court judges.
