Photo: Dean Molina – Chairman, PUC
by Kory Leslie (Freelance Writer)
BELIZE CITY, Fri. Jan. 6, 2023
On December 23, the Public Utilities Commission (PUC) reported that the Belize Electricity Limited (BEL) made a submission in which it estimated that it would lose approximately $43.214 MN in revenue due to the cost of power being higher than was provided for in the Annual Review Proceedings Amendment 2022, and it sought to have a provision put in place for an increase in rates at some future time so that it can recover those funds. BEL’s submission stated that the cost of power for July 1, 2021 – October 31, 2022, was about $28.5 million more than what had been projected and it anticipated the elevated cost of power to continue from January to June of 2023. In a letter to the Chairman of the PUC, BEL’s Manager of Strategy and Business Innovation stated, “… there is an estimated $28.5 MN revenue shortfall due to cost of power being higher than provided for in electricity tariffs during the period under review. BEL hereby registers this sum with the PUC as recoverable in future tariff adjustments and pending further analysis and recommendations to be submitted in the upcoming 2023 Annual Review Proceeding.”
Had the PUC decided to grant BEL’s request, there would have been, at some point in the future, an increase of at least $0.046 per kilowatt hour over the rates outlined for the Full Tariff Review Period. However, upon reviewing BEL’s submission, the PUC arrived at two conclusions: (1) that: “BEL’s excess Cost of Power for the period amounted to $4,405,218 rather than the $26,406,204 claimed”, and “BEL has not provided sufficient justification or analysis to demonstrate that it would continue to incur excess costs on electricity purchases between November 2022 and June 2024”.
As a result, the initial decision of the Commission was that tariffs for January to June of 2023 remain unchanged and that there be no changes to any other previously approved Regulated Values, Mean Electricity Rates and Tariffs, Charges and Fees contained in the 2020-2024 Full Tariff Review. That decision was made known via a public notice issued by the PUC. Further, the PUC’s Initial Decision also indicated that BEL had failed to comply with Order 2 (d) of the Belize Electricity Limited 2021 Annual Review Final Decision Amendment, which made it a requirement for the company to file an updated dispatch and production costings modeling for the period extending from the end of 2021 to 2022. The Commission wrote that this information is “critical for the proper management of the COP (Cost of Power)” and that they would now be monitoring BEL’s dispatch more closely, and that “it is necessary for BEL to supply detail dispatch information on a daily basis moving forward.”
The PUC’s final decision was subsequently published on January 6. That document notes that BEL wrote to the PUC on December 31, 2022, to express their full disagreement with the Initial Decision and that BEL questioned the Commission’s decision-making process in various ways, stating that the PUC would only need to consider the actual costs the company incurred until the end of October last year, along with the reliable estimates provided for November and December, to honor their request. The forecasted higher cost of power for 2023 was only meant to be used for “informational purposes and is indicative of expectations that cost of power will remain high”.
BEL also asserted that the Commission misapplied the regulation in assessing the Cost of Power incurred for the periods in review, and that it is unable to fully substantiate the $3.856 MN in COP invoices because such invoices include bank transfers and translation fees. Further, BEL wrote that the PUC “cannot and should not pretend to be able to provide the public with greater assurance of the accuracy of BEL’s financials than that provided by renowned, qualified auditing firms in Belize, and in the interim, by the company itself that is subject to accounting and financial reporting standards.”
In their Final Decision, the PUC pledged to respond to all the concerns brought forward by BEL, stating that if the $28.5 million In additional costs is to be deferred in a manner BEL believes is best, consumers would have to “bear all excess COP in or around 2024”. Therefore, the PUC reaffirmed its rejection of the BEL’s proposal, and all fees are to remain the same as indicated in the Annual Review Proceedings Amendment 2022.