And while the future ownership of BTL is still uncertain, another utility that can now proceed with plans is the Belize Electricity Limited. Today the Public Utilities Commission sent out a release in which it states that it has made a final decision on BEL's full tariff review exercise. The PUC says it made its final decision and it will grant BEL a mean electricity rate of 39 cents per kilowatt hour. That's an increase from 35 cents and today CEO Lyn Young told us that he is disappointed with the PUC's decision but will have to work with it.
Lyn Young, CEO - BEL
"I am really disappointed because we asked for 40 cents because we needed 40 cents. As you know the special consultant looked at it and came up with a number similar to ours and the PUC has decided not to go with the consultant's recommendations. They have gone with a lower number than the consultant recommended so in that respect we are disappointed.
The PUC is trying to give a rate that they are hoping is going to work. My feeling is that oil prices aren't going to go down. There's a lot of talk about it hitting $70 and some people say it might even hit $100 before this is all over. So my gut feeling is that we're going to be back next year looking at a small adjustment again.
We already have $22 million worth of fuel and extra costs for power that hasn't been recovered. In June we had some problems meeting our bills and we had to borrow some money locally and we had to get a big loan from Fortis to see us through that. In addition to that, for the last two years Fortis hasn't been taking any dividends. So there was a very difficult situation. We're going to have to repay those local loans and repay the loan that we got from Fortis before we are even back on an even key; I think that's going to be a year and a half before we're back on an even key.
We just got the final decision yesterday and we're reviewing it. But I can tell you we have a $22 million rate stabilization account because it's gaining up by leaps and bounds. So it will take us a while to clear that off. In fact the decision is for us to clear it off over four years which, in our estimation, we were asking to clear it off in 2 years and that's a big part of the difference there too. So we are in a difficult cash position but we have to deal with it and I think we have to focus our energy on that first before we can think of anything else.
When they had the sabotage incidents earlier this year that threw a lot of extra costs on us; we had to buy emergency power from Mexico. So over the last couple months for example we were paying Mexico in the region of US$0.09/kilowatt hour as compared to a year ago which was US$0.06/kilowatt hour. In fact when we started the contract with Mexico we were paying between US$0.03 and US$0.04 per kilowatt hour. So you could see the increases have been significant and we are going to have to work our way through that. The good news for us right now is that the Chalillo Dam is not quite finished but we are starting to store water right now. The water level is up considerably so at least we know we have power from Mollejon which is cheaper than the emergency power we were taking from Mexico and much cheaper than we have to pay when we use the gas turbines."
Alfonso Noble,
Chalillo. When?
Lyn Young,
"Its doing what it is supposed to do now in the sense that its storing water which we are using now for Mollejon. The powerhouse at Chalillo itself won't be ready until September, that's where we are going to get the extra power from Chalillo itself. But the majority of the extra power that Chalillo is being built for is to store the water so we can manage Mollejon. So that's happening now and so we feel good about that."
BEL's rates are as follows social rate customers will pay a flat rate of $4.25 per kilowatt hour up to 50 kilowatt hours. Residential customers will pay a monthly service charge rate of $5.38 for usage between 51 and 200 kilowatt hours and 42 cents for anything above that. Commercial customers will pay a monthly service charge of $70. Consumption of up to 10,000 kilowatt hours will be billed at 41 cents anything above that up to 20,000 kilowatt hours will be for 39 cents above that will be for 37 cents.
