Increase in electricity cost proposed for 2019
Thursday, December 13th, 2018
Belizeans could start the new year with an increase in their electricity bill. On Monday, December 10th Belize Electricity Limited (BEL) wrote to the Public Utilities Commission (PUC) to notify them that due to significant increases in the cost of power as of May 2018, the company is proposing an increase to the Mean Electricity Rate to $0.4150 per kilowatt per hour (KWH) for the remainder of the Annual Tariff Period from January 1st to June 30, 2019.
According to BEL, higher prices from Mexico and below average production by local hydro plants increased the cost of power purchased from suppliers. They were able to use its strong financial position to temporarily absorb this $18.9 million increase in the cost of power. As per PUC regulations, BEL is required to apply to recover this increase through an adjustment to the tariff.
In its submission, the Company stated that the PUC’s new negotiations are underway to secure fewer volatile prices from Mexico’s Comision Federal de Electricidad that are typically lower than prices from local suppliers, as was the case during 2013 to 2017. Additionally, BEL will recommend to the PUC, the launch of a Request for Proposals in electricity generation from competitively priced sources of renewable energy.
Many Belizeans and Governmental entities are not pleased with this news. The People’s United Party (PUP) issued a press release calling the proposed hike ‘shameful.’ “The PUP views this as an act of duplicity on the part of both the Government of Belize (GOB) and BEL. Just months ago, BEL had requested an increase of 7.1 % in the cost per Kilowatt hour, and the PUC approved a 6.24% increase which should have been in effect for two years. Now, just five months later, BEL is requesting another increase,” stated PUP.
The PUP further states that Belizeans have been forced to pay more in electricity bills in the past year, not only because of the jump in the cost per kilowatt hour, but because in 2018, GOB lowered the tax-threshold on electricity bills, stating, “to subject Belizeans to yet another increase in the cost of electricity would be unfair and can only be considered as undue hardship when the cost of living is already too high.” This announcement, coming after GOB announced a $25,000 Christmas Cheer to ministers, is considered grossly insulting by the PUP. “It is ludicrous that on the one hand, the GOB can offer $25,000 to their Ministers as a form of Christmas Cheer, and immediately after, suggest taxing all Belizeans through an increase in electricity bills. It is a fact that a rise in the cost of electricity affects every single Belizean and sector in the country.”
This will be the second increase in six months. A resident of Ambergris Caye told The San Pedro Sun that the cost of living is already high on the island. “Six months ago we had an increase in electricity bills. Now we are expected to start the year with another one. I believe this unacceptable for Belizeans to be suffering an increase in everything,” said the resident.
About five months ago, on Sunday, July 1st Belizeans experienced an increase in their electricity bills as the Public Utilities Commission (PUC) granted BEL a 6.24 % average increase in the Mean Electricity Rate. This represented .39 cents increase per kilowatt-hour through June 2020.
They stated that this was the PUC’s final decision in respect of the 2018 Annual Full Tariff Review Proceedings (TRP) for which BEL made submissions in April. The electricity company had asked for an average rate of 39.25 cents over the two years, but in May 2018, the Commission only approved an average rate of 38.62 cents.
Belizeans are asking the GOB to step in and find a solution to ensure that electricity rates do not increase.
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