2020 was possibly the most difficult financial year for Belize's Economy and its working population, devastated by the Covid 19 pandemic. But, although Belizeans are struggling to adjust to pay cuts and jobs lost, your electricity company managed to make record profits last year, 47.3 million dollars to be exact.
Unlike both the private and public sectors, Belize Electricity Limited is reporting that the pandemic had a major positive impact on its operations - even as the the company has massive arrears by customers who are struggling to pay. Also, their sales are down by 20%. But, a significant fall in the company's cost of power from Mexico, allowed the company's cost of operations to go way down, leading earnings to spike dramatically.
It's all detailed in the company's 2020 Annual Report - which was released on Thursday at its Annual General Meeting, and today, we had an extended sit-down conversation with the chairman of BEL's Board of Directors. Here's what he told our Daniel Ortiz about what's behind the surprising outcome of last's year's financial performance:
E. Andrew Marshalleck - Chairman, BEL Board of Director
"Part of the performance is a result of the pandemic. While overall sales of electricity fell significantly, and while arrears of electricity bills have also climbed significantly, the cost of power incurred by BEL to secure the electricity supply to its customers also fell dramatically. That fell dramatically because BEL was able to source, over the course of the year, significant amounts of power from CFE, from Mexico, at extremely reduced prices. As COVID set in globally, and demand for power contracted in Mexico, the price of power from the CFE fell dramatically, and Bel was able to capitalize on that by sourcing more power from CFE, and keeping its costs even further below the decreased revenues, and increased arrears that we saw during the COVID year."
Reporter
"How long can this sort of benefit last, given that at some point, Mexico's consumption rate will increase back to its normal numbers? What happens then?"
E. Andrew Marshalleck
"Well, it's already increasing back to its normal numbers. It's on a climb, and we anticipate that it will settle at a hire - the lower rates from CFE won't continue as demand in Mexico is restored back to normal levels. So, we expect it to go back up. So, the cost of power will go back up."
"Dividends were declared and paid for the previous year, using the benefits of those slows. The Government of Belize, the Social Security Board, and Fortis have all received their dividend payments. So, the profit has been - so far as the public sector is concerned - has been recycled in through Central Government, and through the Social Security Board."
So, while BEL managed to turn those major profits, its customers had to survive the COVID-induced economic crisis. 10s of thousands of Belizeans lost their jobs and had to sit at home for months in hopes that commercial activity would return to their sector so that their companies could rehire them.
Today, we asked the BEL Board Chairman if the company is concerned that its customer base will start to push for relief on their light bills, given those major profits for 2020:
Reporter
"The more adversarial customers and the more adversarial critics of the company may frame the 47-million-dollar profit in the light that these record profits were made off the backs of the pandemic laden public. How would you discourage them from taking such a negative view?"
E. Andrew Marshalleck - Chairman, BEL Board of Director
"Well, the revenues were collected from customers. So, from one perspective, you can say that. But, you need to recognize that BEL does not fix the rates. The rates are fixed long in advance of the period they're charged. And they're based on projections. The authorities did not project what happened with the prices in Mexico. There have been instances where those prices have gone extremely high, and they've also put BEL in financial difficulty. Luckily, in COVID, they came low, so, it allowed BEL to do more than was anticipated during that period?"
Reporter
"How have you all addressed what seemed to be an increase in customer disquiet, where they were trying to suggest - at certain points, even malign BEL - that you all are over-charging. How have you all managed that situation?"
E. Andrew Marshalleck
"Well, I'm aware that there was a small group of customers, but in terms of the whole, you're talking about a very small proportion. For the most part, our customers have been very satisfied with BEL's performance as the consumer survey results show. So, there is always a small percentage of people who make these allegations. The simple fact of it is when you look into a lot of these, there are explanations for it. And, it never is the case that the company is over-charging or stealing. There might be some instances of error in reading a meter, recording a number, or something like that. But, in the main, the billing system works as intended."
