BELIZE CITY, Fri. Oct. 30, 2020– The Belize Electricity Limited’s Full Tariff Review Proceeding (FTRP) commenced in January of this year with BEL’s application to the Public Utilities Commission (PUC), in which it requested a 45.33-cent increase to electricity rates for the new tariff period.
The proceeding concluded on October 28 with a final decision to reduce the mean electricity rates to 40.18 cents, a decrease of 1.19 cents from the current rate, which is 41.51 cents per kilowatt-hour. The new tariff period will be four years long — from July 1, 2020, to June 30, 2024.
BEL’s application, submitted in January 2020, contained a request for an increase to the mean electricity rates in order to recover over 50 million dollars in revenue loss incurred from 2018 to 2019. The loss was a result of the unexpectedly high cost of power from suppliers. BEL’s application sought to recover this loss and provide for investment in solar generation and smart grid technology.
The PUC’s initial decision, given in March 2020, deferred the consideration for the investments; of course, BEL objected to this decision. The proceedings were stalled as a result of the COVID-19 pandemic, but were resumed in July 2020 when BEL requested to submit a new application. The PUC denied this request and proceeded to initiate an Independent Expert (IE) review. The expert recommended that the critical investment put forward by the company be allowed.
Chairman of the PUC, John Avery, said, “The chances are that we reduce the approved investments marginally compared to the initial decision. We’ve reduced the cost of power significantly, and then we made some provisions where BEL can start to recover the $8 million — that shortfall for the last year that finished.
“Those basically resulted in the reduction. I think the average rate we had approved in the initial decision was 42.42 cents thereabouts. Now we are at 40.32, which is the average. The net effect is that starting January, the rates should go down by just under 2.9% from the current rates.”
BEL, pleased by this decision, and considering the impact of the COVID-19 pandemic on global energy prices, has agreed to the final decision put forward by the PUC to reduce energy prices for the coming tariff period.
But while the company has not opposed the temporary reduction in electricity rates, it emphasizes that low rates can only be achieved permanently if investments are made in alternative locally based renewable energy and smart grid technology.
“BEL insists that sustained lower prices can only be achieved through increased investments in local, renewable energy production, smart-grid technology, and evolving energy services to further develop the market for clean and sustainable electricity. We will work relentlessly towards these strategic objectives, as we believe our customers should not be left to the mercy of market forces,” stated the company.
The reduced rate will become effective January 1, 2021. Until then, the current tariffs will remain in effect.