BEL asks for 15% Rate Increase

If an average home pays $200 electricity a monnt, it might soon start paying $230 World Oil Prices have increased dramatically over the past few months and on Friday, March 14, the prices went up to 111 U.S dollars per barrel. Due to this increase, the Belize Electricity Limited has seen it necessary to apply to the Public Utilities Commission for an increase to the cost of electricity.
In an ad that was issued to the media houses, Dawn Sampson, Cooperate Communications Manager at B.E.L told consumers why they are requesting the increase.
“We’re very concerned about the impact high energy prices and have been doing all we can to try to keep the cost of power as low as possible,” commented Dawn Sampson, BEL Corporate Communication Manager. “Increasing our hydro production from 20% to 40% of our energy supply has helped. But over the last five years, power cost from Mexico has increased by more than 100% due to the impact of oil prices. World oil prices are beyond our control and impacts about 60% of our energy supply. This includes power purchase from Mexico and power generated from our local diesel generators.”
The last electricity rate was adjusted in January 2006. At that time world fuel prices was averaged at 65 US dollars per barrel. BEL is asking the Public Utilities Commission for an increase of 6.5 cents per kilowatt hour or 15% average increase. President and CEO of Belize Electricity Limited, Lynn Young says that because of the increase in oil prices BEL must increase their electricity rates.
“The increases that we had to implement are really just to meet the increase in the cost of power. Sixty percent of our supply is indexed to oil prices,” commented Lynn Young. “The return works out to ten percent and that is the minimum that the public utilities commission allows us to make. That return is needed to service our debts and to provide a reasonable return to shareholders. And our debt cost is somewhere between 10 and 15%; that’s the kind of interest that we pay and we pay dividends to shareholders and that works out to about 8% for the shareholders.”
If the P-U-C grants BEL this increase, the cost of electricity will increase from the current 44 cents per kilowatt hour to 50 cents per kilowatt hour. The P-U-C will issue a final decision on the request no later than 15 days from the commencement of the Tariff Review Proceedings. Chairman of the commission, Roberto Young says that 15 days allows for public participation to assist the commission with making an informed decision as to the rate increase. BEL advices those interested to submit comments on this application to the P-U-C by March 25.