P.U.C. insists B.E.L. can afford NOT to raise rates in 2008
Following the Public Utilities Commission’s announcement on Friday, that the Belize Electricity Limited will not be granted an increase in electricity rates, this morning the P.U.C. held a press briefing to explain its decision. According to the commission’s Chairman Alberto Young, three indicators weighed heavily on the final ruling. Topping the list is that the P.U.C. feels B.E.L. can be financially viable for the rest of 2008.
Alberto Young, Chairman, P.U.C.
“We look at their cash flow projections and we emulate it and we said if we were in their position and at this time of high oil prices what would we do to offset some of these issues coming up reference the cost of power and three, we said we need to look at the CPRSA but it needs further interrogation in the A.R.P. and that is where we are allowed time. The TERP is very short time within the Annual Review Proceeding. We have at least thirty days to make sure we can further look at CPRSA and see how the rising cost of oil is affecting the CPRSA and what can we do to minimize its effects on rates.”
Ann-Marie Williams
“And also the cost of living bore heavily on your decision?”
Alberto Young
“Well the cost of living, all of us are feeling it and we know it’s a matter of austerity. You go to the gas pump every time you see it rise but because you’re seeing it today, you decide tomorrow I can’t go until you see the oil prices drop. In our aspect, the methodology we have, we’re not adjusting per month. It’s on a basis of periods and therefore the consumer is unable to see that. Maybe we need a new methodology which changes every month or every time so the consumer can then back off its use.”
In responding to the P.U.C.’s decision, B.E.L. explicitly states “the company doesn’t want to see an increase in electricity rates however, unless oil prices start to fall, B.E.L. will not be able to meet its financial needs in 2008 and the company’s ability to supply power reliably will be compromised.”
B.E.L. is also rejecting the P.U.C.’s claim that the company can manage cash flow by cutting back on expenses, claiming its operating expenditure in 2007 was approximately twenty million dollars and that any additional cutbacks will not be (quote) “sufficient to close the gap and will negatively affect service quality and restrict the company’s ability to meet growth in demand for services.” Those are the same grounds B.E.L. is expected to submit in a separate report to the P.U.C. later this week as part of the Annual Tariff Review Proceeding. The regulatory body stresses that as in the TERP, the public will have the opportunity to participate in the review.
Alberto Young
“For the A.R.P., once they apply we come out and we go public indicating that B.E.L. has applied for an Annual Review Proceeding. We then indicate to the public you have twenty days to put in your comments and after that we have ten days more to make our decision, initial decision. That initial decision, if B.E.L. or even a consumer doesn’t like the decision, they can appeal the decision then we bring in an independent expert to evaluate our findings. We have twenty days to bring him in and then we also have twenty days for him to make a recommendation to the P.U.C. After that recommendation to the P.U.C., we have ten days to come up with a final decision.
Ann-Marie Williams
“And if the public doesn’t like the final decision, what happens?”
Alberto Young
“Well they have the courts. Any interested party can bring up these issues in the court of law but we need to follow these procedures that are chartered in the law.”
According to B.E.L.’s Public Relations Officer Dawn Sampson, B.E.L. is currently preparing its ATRP submission. When asked if B.E.L. is seeking an increase in rates, Sampson declined comment.
