Anna Rossington, PUC?s director of rate setting, said that the rebate to BEL is ?an incentive? to BEL for reducing costs and improving quality. Under the incentive-based program, said Rossington, BEL gets to keep ?additional profits? if they do better than the targets the PUC sets for them.

Another element that could have saved consumers some dollars and cents on their light bills is the introduction of the General Sales Tax (GST). On July 1, 2006, the GST replaces the Sales Tax, which officials have claimed has had a ?cascading effect? from the multiplier effect of charging the tax at different tiers during the trading process. With the new GST, BEL could claim rebate on some of its tax expenses.

Despite what some forecast to be significant savings to BEL from the soon-to-be implemented GST, BEL had submitted its request for no rate changes on Friday, March 31, 2006, which marks the beginning of annual [rate] review proceedings (ARP).

Rossington told us today that any changes resulting from the GST would not be reflected until the next full tariff period, which comes in June 2009.

Still, Rossington informed that an audit of BEL?s figures is still pending. Specifically, the PUC said it would audit the rate stabilization accounts, under which BEL defers increased cost of power charges, including hurricane-related expenses, to consumers until tariffs are reviewed and redefined by the PUC.

The PUCs? Initial Decision, a document dated Friday, April 28, 2006, and available on the PUC?s website, www.puc.bz, outlines the adjustments that the PUC has made, which have, effectively, kept the average electricity rate unchanged at 44.1 cents per kilowatt hour.

Note that according to the table above, there were balancing transactions in the rate stabilization accounts, which cancelled each other out: minus 0.2 cents per kWh for the CPRSA and plus 0.2 cents per kWh for the HCRSA.

Also, while the cost of power was 0.2 cents per kilowatt-hour less than forecasted, that money was rebated to BEL, through a line item tagged ?annual correction.? This translates to nearly $1 million back to BEL in 2006/2007.

Rossington said that if the actual cost of power and the forecasted cost of power were equal, the PUC would have had to increase electricity rates to award BEL its ?incentive??this is even though BEL has not asked for a rate increase.

In its decision, the PUC has approved adjustments in two rate stabilization accounts charges. For the CPRSA, the PUC approved a charge of 2.3 cents per kilowatt-hour, an increase of 0.2 cents over the current figure.

?The CPRSA adjustment has been increased from $0.021 to $0.023 per kilowatt hour to firstly accelerate the recovery of any outstanding balances in the rate stabilization accounts, before effecting a reduction in the consumer tariffs, rates charges and fees, in accordance with the Byelaws,? it said in the Initial Decision.

Meanwhile, it approved a charge of 0.1 cents charge for the Hurricane Rate Stabilization account, a reduction from the 0.3 cents charge approved in the 2005/2006 FTRP.

?The HCRSA [adjustment] has been calculated to reduce the HCRSA balance to zero over the 2006/2007 ATP [Annual Tariff Period]??

When we asked Rossington what the balances of the RSA?s are currently and what they would be at the end of the tariff period, ending in 2007, she declined to quote numbers, saying that the PUC has been unable to get someone to audit the figures.

We then asked what numbers BEL had quoted in its application. She answered that the CPRSA figure was quoted at $28,190,093, while the HCRSA was quoted at $1,015,006. (Both figures were reported as at December 31, 2005. We were unable to determine the exact figure since we have been unable to determine what the forecasted sales figure is.)

(The last report submitted by BEL in November 2005 forecasted 2006 sales at 374 million kWh, but consumption grows annually by 7% to 8%. We figure that if 0.1 cents charge could zero the HCRSA balance of just over $1 million by the end of the tariff period, a 0.2 cents rebate to BEL should give that company at least that much – $1 million. Note that we have not been informed of an exact dollar figure for the BEL rebate.)

The new tariff period begins July 1, 2006, the same date that the General Sales Tax of 9% will be applied to light bills over $150.

According to Rossington, the impact of the GST on BEL?s costs of operation is neither here nor there, since it won?t play any role in the calculation of electricity rates. She said that the PUC is ?still waiting for the numbers from them [BEL],? but they wouldn?t be factored into the equation until the full tariff review proceedings due in 2009.

A deadline of April 20 was set for public feedback on BEL?s application. The PUC said that it received one written submission, which was ?duly reviewed.?

Now consumers have until Monday, May 8, 2006, to respond to an Initial Decision.

On Friday, March 31, the Belize Water Services had requested an 8.76% increase in tariffs; however, Government, the majority shareholder, decided that the application was to be withdrawn?which the BWS did on April 4, 2006.