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PUC explains initial decision to raise electricity rates

BELIZE CITY, Mon. May 7, 2018– Today at around 2:30 p.m., the Public Utilities Commission (PUC) held a press conference to discuss the raise in electricity rates which was requested by the Belize Electricity Limited, and which the commission has recently approved. The conference was conducted by John Avery, the chairman of PUC, and Ambrose Tillett, the director of electricity for the PUC.

Avery began by stating that every four years the PUC conducts a full tariff review proceeding (FTRP), where it forecasts certain values, targets, rates, etc. for the next four years. There is also an annual review where adjustments are made if necessary.

The last FTRP was carried out in 2016, and in 2017 forecasts were made for a decrease in the cost of power (COP), and therefore, corrections were made in favor of the consumer. However, an increase in COP occurred instead, which nulled those corrections.

This increase in COP is the main reason for the increase in electricity rates.

In its 2018 Annual Review Proceeding (ARP), BEL had submitted a recommendation for raising the Mean Electricity Rate (MER) from its current position of $0.3699 per kilowatt hour to $0.3954 for the period of July 1, 2018 to June 30, 2019, and then adjusting it to $0.3875 for the period of July 1, 2019 to June 30, 2020. This would allow for an average of $0.3914 over two years.

The PUC decided to meet BEL halfway by approving a rate increase of 4.4%. According to Avery, this would cause numbers to be rounded up and in some cases, the increase might be closer to 5%.

This would take the current price of the MER to $0.3862 per kilowatt hour. Although this only accounts for a $0.0052 difference, Avery and Tillett assured everyone that every cent equates to 5.5 million dollars for BEL.

This press conference was also used to discuss a project that the PUC is insisting that BEL undertake. At the last FTRP, the PUC urged BEL to work on interconnecting Caye Caulker, which only uses fossil fuels, to the national grid, as it would be more cost-effective since about $3.3 million is spent on the fossil fuels for the island. This project was to be completed within two years, which means it was to have been completed by June 30, 2018.

Avery stated that little progress had been made so far, and as a result, the PUC lowered the rate of return (RoR) for 2019-2020 to 9%. If BEL makes satisfactory progress on this project, the PUC will restore the RoR back to 10%.

Avery also stated that the comments or objections by BEL or by parties representing users of at least 10% of the electricity supply by BEL in the last calendar year may be submitted until the deadline on May 12, 2018.

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