Electricity rates to stay the same, Belize Electricity Limited questions who will pay for increases in cost of power

Published by BBNTEAM at April 30, 2022

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Posted: Saturday, April 30, 2022. 7:27 pm CST.

By Aaron Humes: The Annual Review Proceeding (ARP) for Belize Electricity Limited (BEL), regulated by the Public Utilities Commission (PUC), has agreed that the mean electricity rate (MER) of $0.3999 per kilowatt-hour (kWh) will be maintained through to June 30, 2024.

BEL proposed in its submission on April 1 to maintain the current structure “in consideration of the challenging economic times faced by customers and the country’s emergence from the impacts of the COVID-19 pandemic,” and the Commission agreed, choosing to revise BEL’s cost of power projections and capital investments as well as approved rates of return on those investments.

In a statement, BEL said it “is currently reviewing the PUC’s Initial Decision and will respond by the deadline of May 9, 2022.”
BEL is of the view that the additional cost of power should be defrayed using the running regulatory balance. It would be set as a debt owed by consumers, for which the PUC would implement a rate increase at a date in the future to pay BEL back.

The PUC has decided instead to reduce the rate of return for BEL shareholders from 10 to 8 percent this year, rising to 8.5 percent next year.

Ernesto Gomez, Director, Tariff Compliance and Standards for the PUC, explained to Channel 7 News, “The way we look at it is that during the Full Tariff Review Period, which was in 2020, the PUC set the regulated value of the rate of return. PUC approved an upper limit of 12 [percent], and a lower limit of 8 [percent]. So, there is a target of 10 [percent], but the PUC has the authority to move within the upper and lower bands. … All that we’re looking for, both BEL and PUC, is stabilizing the rates as much as possible, and especially that we don’t negatively influence the economic recovery of the country.”

In response, BEL chairman Andrew Marshalleck noted that with current energy concerns worldwide, it will not be easy to keep rates stable, but said the company would try its best and leave the question of its recoupment for another time.

Marshalleck added further that with inflationary pressure on energy still a concern, Belize is moving toward implementation of further in-country generation capacity by first introducing utility-scale batteries into our transmission system, strategically, and second, aggressively pursuing solar generation with the agreement of all including the PUC. He also said BEL needs to pay more attention to the decennial energy strategy plans which have for the most part been ignored. Further backstops are needed beyond Mexican purchases and the hydro-electric program, he argued.

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