Since January sixth, 2009, the Public Utilities Commission has ordered not one, but two rate decreases – but still, you light bill has not gone down! And it won’t go down this month either! That’s because the Supreme Court today granted BEL an injunction staying the implementation of the second decrease which was ordered on February sixth.
The matter was heard this afternoon before Justice Minette Hafiz Bertram. BEL’s attorney Michael Young successfully illustrated to the judge that the utility company was in a financial crisis. The PUC entered affidavits disputing that claim with evidence, and arguing that the rate cut is based on revenue which by law should be passed through – and credited back to the consumer. After a brief deliberation, Justice Hafiz found that the risk of injustice would be greater if she refused BEL’s claim – and so she granted an injunction until the appeal of the PUC’s June 2008 decision is heard. We spoke to both sides as they left the courtroom.
Michael Young, Attorney for BEL
“So it is suspended, that decision is suspended until the determination of the court.”
Jules Vasquez,
This now has the effect of denying consumers the decease in electricity rates that they have been hoping for. Is that an unintended consequence?
Michael Young,
“Well the intended consequence is that the Belize Electricity Limited would be able to address its financial situation which had been affected adversely by the previous decisions of the commission which are being challenged. Ultimately as we argued in court that this position should be for the benefit of consumers because even though any consumer would want a reduction in electricity rates, the health of the utility company is critical, not only for the utility itself but ultimately for the consumers.”
Jules Vasquez,
What about the financial position of the consumers, they are owed $18 million in the cost of power that has reduced and BEL is refusing now to pass that on?
Michael Young,
“Again Jules it is a matter at looking at what is in the interest of consumers in the long term. Even the independent expert said that, and you can see it in his report, that it is of critical importance for the commission itself to understand that short term reduction in rates could ultimately exacerbate the rates which consumers pay.”
Jules Vasquez,
We heard the judge speak about the financial interest of the applicant, of BEL. Has anyone considered the financial interest of consumers for whom BEL, according to the PUC, has $18 million in extra cash because of the decreasing cost of power due to the falling price of oil?
Andrew Marshalleck, Attorney for PUC
“Well that is precisely the point that I sought to make to the judge. I think at the end of the day she felt it was less risky to impose the additional burden on consumers rather than putting further burden on BEL in circumstances
where they allege they can’t bear anymore.”
Jules Vasquez,
The allegation is being made that the long term stability of the utility needs to be taken into consideration because it has to remain viable in everyway and so it is best to err on the side of I guess the corporate concern rather than the consumer concern.
Andrew Marshalleck,
“I think that’s the essence of the judge’s ruling today. At least until the appeal is heard it is best to err on that side.”
Jules Vasquez,
How unfortunate for consumers.
Andrew Marshalleck,
“Indeed so.”
John Avery, PUC Chairman
“I am very disappointed by today’s ruling. I mean Jules for the last nine years the laws have said the cost of power is a direct pass through. The rate reduction that we did recently was a direct consequence of the cost of power. The judge obviously felt that BEL could stand to lose more if there was something flawed in the way we went about making this amendment as opposed to consumers. I am disappointed because the cost of power having been reduced, there is no question about that. That is there for every one to see. BEL even in Mr. Young’s affidavit admits that the amendment is beneficial to them and the public interest. So there is no question that there is a reduction in the cost of power, that BEL’s expenses have been reduced, and so the amount of revenue that they had required, they don’t require anymore. There is no question to that. So all of that makes it even more disappointing because I can’t see why the claim of financial difficulties should have such a bearing on the decision today which we believe at the PUC is a false claim.”
Jules Vasquez,
But speaking from a position of a consumer, the consumers have to feel pained because the price of fuel has gone to a fourth of what it was, if not a fifth of what it was and then second, BEL has, according to the PUC, about $18 million in its financial system that it is getting interest free which is consumers’ money.
John Avery,
“Exactly and that up until the end of January because they charge consumers at the 44.1 cent rate from June of last year, they charged that in January and so now at the end of January that balance is actually somewhere closer to $20 million. So in the last seven months BEL has collected from consumers some $20 million more for power than they’ve spent.”
Avery maintains that the BEL did not provide any real evidence of a financial crisis. Young says BEL had presented to cabinet a proposal for how both the consumers and the company could benefit from a mutually agreed to rate decrease but the proposal was not taken up. Because of the public interest, the judge has undertaken to have the appeal of the June 2008 decision heard expeditiously.
