Last night the PUC dropped the hammer on BEL in a strongly worded press release.
The announcement was that the average electricity rate is going up due to the increased cost of power.
But the news was that the PUC accused BEL of purchasing power from the wrong source - and in the process - costing consumers two million dollars.
The statement created the impression that BEL was slacking on its submission and making power purchase decisions that ended dup costing consumers millions of dollars.
About two hours ago - BEL executives held a press conference to call those statements unfair and untrue:
Dawn Nunez - GM, Employee and Corp. Services
"Very disappointed, I could tell you that when we heard the news yesterday it created a lot of buzz in BEL, we were very disheartened about it and we need to defend the reputation of our employees in the face over the very unfair, untrue allegations that were made by the PUC yesterday."
In "Comments related to the Draft Decision", the PUC said, quote, "from September 1, 2021 to September 24, 2021, there were excessive instances where BEL elected to purchase power from BECOL when the cost of power from CFE in Mexico was significantly lower. The PUC also identified instances, in the last week of September 2021, where BEL elected to purchase power from CFE when the cost of purchasing power in the domestic market was significantly lower."
The notes continue, "The combined effect of the above was that the Cost of Power to consumers for the month of September 2021 would be $2,000,000 (two million dollars) more than it could have been had BEL dispatched using the lowest-cost mix of generation plants to meet demand." End quote.
BEL says it received that complaint from the PUC in October and responded with the facts, but never got an answer from the PUC:
Dawn Nunez
"We responded to the PUC comprehensively in writing, we provided them with all the information, we refuted the allegations. Furthermore, we asked the PUC to please respond to us and provide us with the evidence for your allegations against the company and such a request is quite reasonable because if you make an allegation against anyone, it's expected that you are going to bring evidence and supporting information to support your claim. The PUC did no respond to BEL's request for evidence and can also share with you that later on there was a discussion between the CEO of BEL and the chairman of the PUC. In that discussion, the CEO inquired why there was no response from the PUC and the chairman's response to was to the effect that BEL has documented it's position and that is the end of that matter. So having said that, we were very surprised to see the allegation being made in the communication by the PUC yesterday."
Leon Westby - Mgr. Strategy and Business Innovation
"The PUC has the authority and they have been adamant that they will not allow cost to pass on to customers if they deemed that those cost were not justifiably incurred. If you look at their decision, the PUC accepts the cost of power that was submitted by BEL for the month of September 2021 as is, which means then they had accepted BEL's reputation of that allegation, that we mismanaged cost of power in that month, that's the only explanation. So it begs the question, what are their motivations?"
Dawn Nunez
"Had we dispatched power in the manner that the PUC is suggesting that we should have, we actually yes, we would have indeed saved customers 1.5 million dollars in cost in relation to cost of power but on the other hand, we would have incurred about 2.3 million dollars in spill charges."
Jules Vasquez
"But you're still talking there about a hypothetical and it always concerns me that BCOL is a 1/3 shareholder in the ownership of BEL, so I'm always concerned when decisions are made to purchase power from BCOL at times that are not optimal because there is in my opinion, a manifest less than arm's length relationship between the power supplier and the power purchaser and the consumers are in between."
Dawn Nunez
"I can say very confidently that the way we dispatch power control center and specifically talking about our staff there who is responsible for the minute by minute, hour by hour decision, it's govern by the principal of ensuring that the cost is as low as possible and there is reliability to the customer."
Obviously the PUC was not convinced. In other areas of the public documents, the PUC says, quote, "The Commission intends to ensure that future dispatch decisions are reasonable and prudent and to disallow any request for a rate increase, where, in its view, BEL's dispatch decisions were not consistent with good utility practices."
We asked the BEL execs about the tone of the statements:
Jules Vasquez
"Is it that you feel that the PUC has some type of agenda to humiliate BEL in front of it's consumers? What could it's agenda be to speak publicly like this?"
Dawn Nunez
"It's very regrettable, we don't want to speculate, invest any time and energy in trying to figure out where all of this is coming from. What I can say though, its regretful, it's not good for our customers, it's not for the country because we have very important things we need to be looking after."
Jules Vasquez
"As the regulatory liaison, how do you respond to this very strident criticism which says that your submission was late, your submission was inadequate and that you must expose all your cost for review, that it takes exception to the way BEL continues to flout the law and intentionally ignores reasonable request for information such as supporting invoices for cost of power, dispatch, productions, modelling including assumptions and formulae, that is very direct accusation that only are you all lacking in your timeliness and in the completeness of your submission but that you are flouting the law continuously. What's your response to that sir?"
Leon Westby
"I'll say this, that it was disheartening and it would discouraging but as Dawn explained, our leadership is preoccupied with our strategy that's focused on building out the system to better serve our customers."
