Low rainfall may force electricity rates to go up! BEL appeals to Public Utilities Commission

Belize Electricity Limited (BEL) announces that the company is making a submission to the PUC to increase electricity rates to Belize consumers.
BEL is saying that the Cost of Power has increased by more than 30 per cent above the PUC’s approved reference Cost of Power.
This significant increase in Cost of Power has been occurring since July 2012 due to various challenges faced by the three largest Independent Power Producers that supply BEL with electricity, a company release states.
BEL states that it is committed to do all within its control to meet its cost of power projections and seek ways to lower it even further.
BEL will be working closely with the PUC in this regard and meetings on this matter have already commenced.
BEL has said that the increase in costs in July 2012 was caused by low rainfall levels at the onset of the rainy season, which resulted in considerably lower hydroelectric production.
This, coupled with production problems at Belize Cogeneration Energy Limited (Belcogen), has forced BEL to buy more power from Mexico, at an average cost of 42.9 cents per kilowatt hour (kWh) compared to the PUC’s reference cost of 26.2 cents per kWh.
Comisión Federal Electricidad (CFE) of Mexico significantly increased its Cost of Power, after it experienced problems with its natural gas supply from PEMEX and its hydroelectric plants in Mexico are experiencing similarly lower rainfall levels.
To reduce the burden to customers, BEL is appealing to the PUC to set the recent increases in Cost of Power against the $30.2 million that BEL owes customers as ruled by the PUC in February 2012.
BEL is also proposing to temporarily reduce its mark-up, Value Added Delivery until its energy suppliers have recovered from their present challenges.
This, the company says, would result in a lesser adjustment to the electricity rates. In return, BEL would pay off customers over a one-year period instead of the 4-year period prescribed by the PUC.
After these adjustments, the unrealized earnings would be expected to be recovered in the next Full Tariff Review Proceeding or when cost of power falls to more manageable levels.
This arrangement is possible since BEL has already secured the financing required to absorb this spike in cost so as not to increase rates in 2012.
“We have been managing this situation towards minimizing impact on customers,” said BEL’s Chief Executive Officer Jeffrey Locke.
“We have kept the lights on and also paid back customers at a much faster rate than the PUC had prescribed,” Locke pointed out.

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