It was made public in 2012 that electricity rates would increase by 16.87 percent for the New Year. The new rates went into effect on January 1, 2013. What was not made known to the public until this week was the distribution of the increased rates.
The Belize Electricity Limited (BEL) said that the increase was necessary to recover additional cost of power for 2012 and to cover increases in the cost of power for the period of January 1 to June 30, 2013.
It was the Public Utilities Commission (PUC), however, which issued a press release that outlined the way the increase would be distributed. What seemed to some to have been unfair in the distribution is the fact that the rate for the street lights, paid for by Government, did not increase, but it did increase for consumers.
The PUC had proposed that the rate for street lights be increased by nine cents from 55 cents to 64 cents per kilowatt hour, but the government rejected that proposal and requested that the increase be placed on the rates for other customers.
The Mean Electricity Rate (MER) has increased from 41.81 cents to 48.86 cents per kilowatt hour for residential customers.
According to reports by the media, Dr. Leroy Almendarez, Director of Tariffs and Administration for the PUC, said that the reason the government objected to an increase in street light rates is because they need the relief in expenditure. The government’s claim is that they did not receive any relief when rates were reduced before.
Because the GOB decided it will not take up the increase in cost of power for street lights, the decision was made to subsidize the cost to social rate customers. The PUC is a body appointed by the government, so the approval for the increase was considered by the PUC as the GOB’s right to reduce any subsidies that it provides through electricity tariffs. That means that the existing tariff for street lighting that is 55 cents per kilowatt hour, will remain unchanged.
Almendarez said that with the tariff for street lighting remaining at 55 cents per kilowatt hour, there was a need to redistribute rates in order to realize the revenue that BEL still needed, thus leading to the 16.87 percent increase that they calculated would be necessary.
No resident can escape the increase in their bill, but customers are advised to avoid a massive increase in their electricity bill by trying to be conservative in their consumption of power. How that will be done is all dependent on how residents use their electricity, Almendarez said.