But above all the bickering and back and forth, is the rate increase for the next 6 months. BEL says they didn't ask for an increase in your electricity rates. Yet, the PUC has made a decision, contained in their final draft of their 2021 Annual Review Proceeding, to adjust the mean electricity rates from 39.99 cents per kilowatt-hour to 41.58 cents per kilowatt-hour.
The general public and the company will get an opportunity to voice their opinions on that decision. But shortly before the start of our newscast, we got an opportunity to speak with Ernesto Gomez, the Director of Tariff Compliance and Standards at the Public Utilities Commission. He's the PUC's main official who puts together the rate reviews, and he justified the proposed increase in your electricity rates as a consumer protection mechanism.
That's because a few months ago, Belizean consumers owed BEL some 35.4 million dollars. It's called the running regulatory account balance, and it's a detailed analysis where consumers got too much of an ease for past years of electricity provision, at BEL's expense. They paid more for the electricity supply you benefitted from, and yet you basically got it at a discounted price, due to the regulatory process.
So, since BEL's cost of power spiked in recent months, the PUC thinks that it is prudent for Belizeans to pay that back now, rather than add it to the debt of the regulatory balance.
Here's how Gomez explained the rationale to us:
Ernesto Gomez - Director, Tariff Compliance and Standards, PUC
"Normally on a submission for these rate review in December, BEL would make a specific request. In this case their submission was a little bit different, it was worded different, it was basically as an information of the variance of cost of power and the information that was officially done, was only up to the end of the year which is the 31st of December, 2021. It's on the attached tables that then you can see their projections from January to June added another 5 million dollars to the pact and as a result when you add up all their information from their letter of submission and the attachment, it turned out be a little over 9 million dollars. So, we saw it strange that there is no direct request for a rate increase but at the same, they are telling you that there is projections that the customers will owe BEL this amount of money. Adjusting it later because of the regulatory process, the next opportunity for adjustment is basically on the rate review period 2023-24 and at that time, you don't know what the variants of cost of power will be, if it will balloon bigger and it will become a bigger hit for the customer. So in that decision by the commission, with our recalculation and everything, we consider that it is prudent right now to adjust the 4.5 million dollars by 1 and a half cents now rather procrastinate it and leave it for the future. That is a commission's decision on the best interest of customers."
For its part BEL says that regulatory account balance is a number that is in constant flux, and the balance is right now at 21 million dollars, which is part of the reason they did not request a rate increase.
We turn now to the dispute over the cost of power.
You've already heard BEL's explanation about why they chose to use Hydropower, instead of buying energy from CFE in Mexico. We asked PUC's Ernesto Gomez to explain their counterpoint on that matter:
Ernesto Gomez
"The general contract with BCOL basically say if there is spills that BEL must pay and that is passed down to the consumer and it standard that in July/August the rains come and it fills the dam and BEL is very cautious that it doesn't reach spill levels so that it doesn't incur those types of extra charges. So that is a standard concept, the situation is that since 2014-15 the patterns have been changing due to climate change. The climate is not really following history it's changing, so what's happening there is August they did get a lot of rain and they actually build up about 8 meters of water in the dam. When they saw that it is obvious to think that there is a lot of rain coming so they better use the dam but it didn't rain anymore and the regional forecast for the Caribbean was basically that Belize is suppose to be on a drought watch and they didn't forecast any rain until February. The rain is not coming in those levels that would normally fill the dam but of course we rely on history you would do what they did, run down the dam and by the 23rd of September they reached levels of water that they cannot continue using the dam and they lose that resource. Now while they were draining the dam, they were foregoing some very cheap prices from Mexico. BEL is right in saying under normal circumstances if you use only history that's the way it should have gone but if you apply a little of climatology into it, you will realize that decisions could have been made different. A little consultation with climatology would have told them different and they could have shifted that decision and help the consumers in general."
We also asked Gomez to discuss that complaint that BEL did not disclose all the necessary documents on its costs of power. The suggestion was that BEL, quote, "continues to flout the law". End quote. Here's how Gomez explained why those alleged omissions are an issue:
Ernesto Gomez
"The idea is that we keep repeating to BEL and all the licensees that the PUC bylaw give the power of the PUC to ask for any and all information they want as much as they might judge that it is not necessary, so really by us officially asking for information and you not supplying it, you are breaking the law and this comes after multiple times of request in writing and still seeing that necessity to get it. I wouldn't call it micro managing but micro regulating because if you are very transparent and you open to the information we request to you, then we really don't need to amend regulations but if you are holding back information that we require then it reaches a point that we have to use the legal authorities to be able to get that information and hence the amending of the regulation is to be able to give us that facility."
As you heard, there is a discussion to amend the regulation to ensure that there is no ambiguity in what information needs to be disclosed.
