Business

BEL accepts rate cut but 2016 may be a different story

By Alexis R. Milan
Staff Reporter

Belize Electricity Limited has accepted a proposal from the Public Utilities Commission to cut electricity rates by 15 percent, but the company says it will seek a rate increase for the next full tariff review period (FTRP).

BEL had originally suggested a 10 percent cut but after review, the PUC saw that the power company could give more.
BEL said its calculation is based on ensuring the company’s stability, while the PUC’s initial decision was in line with its own rate-setting methodology.

BEL said it remains open to dialogue with the PUC as it prepares to make its final decision regarding the latest annual review proceedings. The new rates come into effect on July 1st and remain in effect until June 2016, when BEL says it may request a rate increase.
Last week PUC Chairman John Avery said the 35 cent per kilowatt-hour rate represents a 15.24 percent cut.

“This 35 cents is setting a rate that will cover their cost for next year but also rebate to consumers the excess that BEL has had over the last couple of years,” Avery said.

The PUC is mandated to calculate the rates based on particular factors, including Operational Expenditure (OPEX) so its recommendations are based on a very specific formula in the interest of fairness to both the company and the consumer.

Avery explained that when adjustments need to be made the PUC makes them where they are needed, whether in favor of the company or the consumer.
In last year’s review, BEL recommended that energy rates be reduced to 43 cents per kilowatt-hour but the PUC, using the same formula, determined that BEL’s initial proposal was too low and recommended a rate which was slightly higher at $0.4347 cents a kilowatt hour.

At the time, Avery explained that if the PUC had approved BEL’s recommendation, BEL would have needed to make an adjustment later, which basically would have meant higher rates for the consumers. He added that as BEL expands its coverage and its consumer base, future adjustments should be in favor of the consumer.

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