We also spoke with the Chairman of BEL, Andrew Marshalleck, about the decision.
In an extended sit-down, he told us that while the company disagrees with the PUC's decision, they are pleased that they get to provide their customers with relief from a logical increase in electricity rates. Here are those comments:
E. Andrew Marshalleck, SC - Chairman, BEL
"Daniel, you know, in this environment, you have rising fuel prices. I hear discussions now about rising bread prices. We're in an inflationary period, and the pressures on energy prices are no different. But, we had taken the view that we should act as a stabilizing influence in that environment and had recommended that prices not be increased for the next period. The recommendation anticipated that the balance of the cost of power over and above what you're collecting, via the rates, would have been carried forward in the regulatory account balance. The PUC has given an initial decision. While they agree with us that rates should not be increased for the next period - so some good news for Belizeans. From June through July next year, electricity rates will remain the same. And that's no easy accomplishment. The world over, energy prices are going through the roof, and Belizeans should appreciate the stability that has been offered at the rates that BEL has provided. But that said, the difference with the PUC approach, while they've agreed with the result that the rate shouldn't change, they've achieved that in a different way in that they've reduced the primarily the rate of return allowed. So that, in effect, what it is requiring is that shareholders absorb the extra cost to keep prices artificially low."
So, what about BEL shareholders paying to keep the light bills artificially low? Here's Marshalleck's comment on that:
Daniel Ortiz
"If I'm not mistaken, the regulatory account balance approach would have been that Belizeans would pay that back, over a period of time when things would have improved for them."
E. Andrew Marshalleck, SC - Chairman, BEL
"Correct, through a future adjustment of the rates."
Daniel Ortiz
"But the PUC has decided that no, you, BEL, must pay for it."
E. Andrew Marshalleck, SC
"Well, not me, BEL, the shareholders at the end of the day. They've reduced the regulatory rate of return. Now, we don't agree with that approach, but the result, I think, is more important. What we set out to achieve is even more important in this inflationary environment that we face. It provides a stable base from which, as a people and an economy, deal with this inflationary pressure. So, rather than making them worse, we're providing stability over this period, so far as energy cost is concerned. Now, at the end of the day, whether that extra cost for adopting that approach is visited on the shareholders of BEL, or there is some adjustment to some regulator balance, where it is recouped in the future, that's a fight for another day. And I expect we will have it at some point. But for now, we're happy that we can tell Belizeans that your rates will remain the same through July next year. Let's take the optimistic view. Belizeans can look forward to no change in their electricity rates into the next period, which runs from the beginning of July this year through June next year. There will be no change in utility rates. There might be changes in the price of bread, and in fuel, but your energy costs should hold for now."
