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December 16
13:20 2018

Belize Electricity Limited announced this week that the high cost of purchasing power from Mexico has forced the company to seek an increase in electricity rates from the Public Utilities Commission.

BEL said that it made the formal submission to the PUC on Monday for an increase in the Mean Electricity Rate (MER) from 39.3 cents per kilowatt hour to 41.4 cents per kilowatt hour, which would take effect for the remainder of the tariff review period from January 1 to June 30 2019.

“Since May, higher prices from Mexico and below average production by local hydro plants resulted in an increase in the cost of power purchased from suppliers. Nonetheless, BEL was able to use its strong financial position to temporarily absorb this $18.9 million increase in cost of power,” BEL said.

The company pointed out that PUC regulations allow for the utility to recover that loss through a tariff adjustment, and notified the PUC that new negotiations are underway to secure less volatile prices from Mexico’s CFE that are typically lower than prices from local suppliers, as was the case during 2013 to 2017.

BEL went on to say that the company would recommend to the PUC, the launch of a Request for Proposals (RFP) in Electricity Generation from competitively priced sources of renewable energy, and emphasized it is confident that it will be able to achieve its objective to lower electricity rates once again by the end of 2019.

Ambrose Tillett, Director of Energy at the Public Utilities Commission, said that the PUC will have an initial response to BEL’s proposal before Christmas and a final decision by December 31. Tillett explained that there are three considerations made when calculating electricity rate: cost of power, operating the network, and servicing the customers. PUC only has to conduct a limited review for the proposal focusing only on the variable portion of purchasing power.

“Purchasing power represents 60 percent of the total rate. Of the amount for purchasing power, sixty percent of it is fixed. So we only need to review the 40 percent that is variable to see if BEL’s proposal is viable,” Tillett said.

BEL’s request represents the second time the company has asked for an increase in the MER for 2018. The first came about in March when BEL requested to have the MER brought up from 36.92 cents per kilowatt hour to 39.5 cents a kilowatt hour. The PUC approved an increase to 39.3 cents which took effect on July 1.

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