Lower electricity rates for the poor:it was one of the biggest plums in the Prime Minister's pre-election budget presentation in 2003 and now, the PUC has taken that plum back. We'll tell you how that went, in a minute, but first, for context: this was the boast made by the Prime Minister in January of 2003.
Said Musa, Prime Minister of Belize
[January 2003] "Starting April the 1st 2003 the kilowatt cost of electricity will fall by 31% for small and medium consumers. The Public Utilities Commission and Belize Electricity Limited will increase the upper limit for qualification for the social rate category from 50 to 125 kilowatt hours per month. Under this initiative some 14,500 small and medium residential consumers will enter the program, bringing the total number of households benefiting from the program to 24,000 or 42% of the total customers served by BEL."
Now, the order of the PUC in the latest full tariff review is to take that 31% saving back. That means an entire bracket of consumers at least 14,500, who use between 50 and 125 kilowatt hours per month will see their rate increase sharply, from 25 to 38 cents per kilowatt hour, an increase of over 50%. It's a bitter pill for these small to medium users to swallow, but again, the comedown is the product of playing politics with power suppliers.
From the outset, the expansion of the social rate was not the product of a rationalized tariff review process as much as it was an election-year political stunt, carried through with the commission of the PUC and the foreign owned BEL. The understanding basically was that 58% of BEL's larger customers would subsidize those 42% paying the social rate.
But, in a bottom line oriented corporate environment subsidies are always on the chopping block and now, due to the skyrocketing price of fuel, BEL - whose net profits were $15 million last year - is complaining that it has major cash flow problems and is having trouble meeting its financing commitments. So the first thing to go was the broadly subsidized expanded social rate.
Still, about 10,000 consumers who were originally under the social rate bracket, who use anything less than 50 kilowatt hours per month will pay the subsidized rate of 25 cents per kilowatt hour. The new rates went into effect on July first, so the changes to the bills of those estimated 14,000 consumers will be reflected in their next bill.