Headline — 12 March 2016 — by Adele Ramos
PUC approves 4% increase in electricity rates

BELIZE CITY, Wed. Mar. 9, 2016–On January 22, 2016, the Belize Electricity Limited (BEL), a government-controlled utility, asked the Public Utilities Commission (PUC) for an 11% increase in electricity tariffs—from 35 cents for each kilowatt-hour used to 39.04 cents. On Monday, PUC chairman, John Avery, issued an initial decision, instead approving a 4% increase.

Avery told the media at a press conference held on Wednesday afternoon that although BEL had asked the PUC to approve a higher mean electricity rate, the PUC had decided that the new rate should be 36.43 cents.

Although the mean rate is 35 cents per kilowatt-hour, various classes of customers pay different rates. For example, social rate customers pay as little as 20 cents per kilowatt-hour, but the proposed change would put that rate at 21 cents. Similarly, residential customers who use less than 50 kilowatt-hours would pay 29 cents as opposed to the current rate of 28 cents, if the proposed rates are implemented.

The new rates, if approved, would take effect on July 1. Whereas the benchmark tariff would be established for the period 2016-2020, the PUC reviews the rates annually and makes adjustments to the rates periodically, to more accurately reflect the true cost of power.

BEL had proposed that over the 4-year period, it would invest $192 million and spend a further $561 million to purchase power from its suppliers, which include the Belize Electric Company Limited (BECOL), which supplies hydropower to the national grid; BELCOGEN, which supplies power under a co-generation arrangement with the Belize Sugar Industries; as well as Comisión Federal de Electricidad (CFE) in Mexico.

The PUC projected $901.5 million in electricity sales over the same period, at the proposed rate of 39 cents per kilowatt-hour. The rate approved by the PUC this week would give BEL roughly $193 million in revenues from electricity sales for 2016/2017 and a total of $845 million between 2016 and 2020. The decision includes $16 million in corrections to consumers, partly due to savings the company made up to the end of 2015 which are being passed down to consumers.

Avery told the press that at the next rate review, there will still be some corrections to be made in the favor of consumers, because during this six-month period, January to June, BEL is paying less for power than what the PUC had approved. Rates could see a reduction as a consequence, he indicated.

In a statement released earlier this week, BEL said that it is reviewing the PUC’s March 7th decision.

The company said that the PUC’s initial decision proposes a $57 million reduction in BEL’s projected cash requirements over the next four years.

“The company will review the details of the initial decision to determine which programs and services the PUC is proposing to cut in order to comply with this decision. BEL will formally respond to the PUC by March 22, 2016 as required by law,” the company said.

Interested parties representing persons or entities who use at least 10% of the electricity BEL supplies within a given year may also submit written comments or objections to the initial decision by the 15-day deadline.

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