P.U.C. chairman reacts to B.E.L. threats
Following the threats by B.E.L. boss Stan Marshall that the company would be forced to implement blackouts if a rate increase wasn’t approved by the Public Utilities Commission, this afternoon P.U.C. Chairman John Avery went on the offensive. According to Avery, while BEL is making an aggressive case for a price hike, its premise appears inconsistent.
John Avery, Chairman, P.U.C.
“What we have here with B.E.L., they have accused the P.U.C. of acting illegally in many instances. In particular, where this Mollejon transmission facility is concerned; that line was already built fourteen years ago, it was owned by B.E.L., they chose to enter an arrangement with BECOL where they would retroactively pay for the entire line at ten percent interest over a period of time. Based on the interest payments and everything, it’s easy to see that they paid well over thirty-five million dollars to BECOL for this line and it serves no benefit to customers. The line was already there. Why go and pay for this line? They complain of cash flow position but the way we have to look at it is that man they’re freely giving over their cash to BECOL. Now the P.U.C.—because we have formed many correspondences between B.E.L. and the P.U.C. where the former chairman or one of the former chairmen told B.E.L. explicitly that we will not allow the customers to bear the cost of that line that you chose to pay to BECOL. So that is one major issue that B.E.L. needs to address before we can take any concerns about cash flow that seriously. And coupled with the fact that based on who they access their supply, it is usual that during the first few months of the year they operate at a slight deficit but during the final months of the year they make that up and this year should be no different.”
“There’s one other thing; B.E.L. reported and they’ve been reporting this from the time they made their TERP submission, that they had to defer six point one million dollars to the CPRSA in the first two months of the year. Well, what we found is that B.E.L. has a dispatch plan where they would access a certain amount of power over the period and they diverted from that drastically. They took less power from the cheaper sources and instead accessed power from the more expensive sources. In their objection they reported that we had more rainfall for the first three months of last year as compared to this year and that is why you had that big diversion from what they did last year. We’ve checked with the met service. In the areas surrounding Chalillo and Mollejon and the entire river system, based on the met service, we’ve had ten to fifteen percent more rain in the first three months of this year than last year. So a lot of the positions that they’ve taken, we can’s see that they’ve properly explained those positions to us in a convincing manner.”
“The thing is, we will not try to be unreasonable with B.E.L. we understand the situation right now. In fact, we’ve advised customers that the best way to keep your cost down is to start to conserve because the cost of fuel will continue to go up. It may be artificial but it’s a reality and so we will be not be unreasonable, we understand their position but we felt that there are certain things that B.E.L. has been getting away with—for want of better words—and we just felt that it is time that we set those straight.”
In related news, following B.E.L.’s objection to the P.U.C.’s initial decision on rate increases, an independent expert has been appointed. Over the next two weeks, Dr. Jonathan Lesser, a Washington D.C. based consultant, will be reviewing the Commission’s findings and B.E.L.’s presentations. His report will be submitted to the P.U.C. no later than June eleventh.
