Last week Friday, the PUC rejected BEL’s request for an average 15% increase of electricity rates. Today, the Commission held a press conference to explain the reasoning behind their decision. As tariff analyst Leroy Almendarez told a press gathering, in a time of soaring prices, just like everyone else, BEL has to take austerity measures.
Leroy Almendarez, Tariff Analyst
“We are saying that because we denied the decision or disapproved the decision then it simply means it is a matter of revisiting, because they are saying, ‘yes we need this to ensure that we can manage our cash flow because we are short here.’ But if they go back on those forecasted expenditures monthly, we can see areas where they can cut.
BEL in itself then must find strategic ways to take its own austerity measures to ensure. For example, if you have capital expenditure, which are the minimum expenditure that you can make to keep yourself solvent, to keep yourself operational. In terms of operational expenditures, those are forecasted figures. Those forecasted can be readjusted through careful analysis of what those things will be.”
C. Victor Lewis, Director – Electricity
“The Chairman has been saying that look carefully at what you plan to do for 2008 and put a strategy in place to make sure that you minimize the cost to consumers. You will live but the consumers must live also.”
Leroy Almendarez,
“But you have ensure that in some way, the best indicator of an economy or economic growth is the social welfare or well being of the individual and that should not be compromised because electricity is not the only utility we pay. But we must also make sure that we balance it, that the viability of the utility is also not compromised.”
And that viability is just what BEL says is being threatened. In a release today, the utility warns that, quote: ”unless oil prices start to fall, BEL will not be able to meet its financial needs in 2008 and the company’s ability to supply power reliably will be compromised.”
A dire warning and BEL says it’s presently borrowing money to meet the cost of power but that can’t continue and if it does the company says it will not be able to meet its financial requirements. And that being said, BEL and the PUC now enter another round of negotiations, the Annual Review Process – or ARP which will be submitted sometime this week.
