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Light & Power seeks rate hike

Article by Shawn Cumberbatch – taken from the Weekend Nation – October 8, 2021

Barbadians could see their monthly electricity bills surging by as much as 20 per cent under new rate increases being proposed by the Barbados Light & Power Company (BL& P).

In response, Minister of Energy Kerrie Symmonds said while he was aware BL& P had filed an application for higher tariffs with the Fair Trading Commission (FTC), it was not a done deal. Some of the utility company’s customers also voiced early opposition to the proposal.

In January 2018, the FTC announced that BL& P served notice of its intention to submit a formal rate application in the second quarter of 2019. However, yesterday the Canadian-owned company announced that on Monday it “filed an Application with the FTC for a Review of Electricity Rates”.

BL& P, which has about 130 000 customers, said 35 per cent of them, who it “assumed to consist mostly of low-income customers” and used less than 150 kilowatthours each month, would pay no more than a $6 increase.

That is based on the rates that the company has proposed to the FTC. It added, however, that for other customers “the typical bill increase resulting from the proposed rates is estimated to range from five per cent to 20 per cent depending on the tariff on which customers receive their service”.

Before 2010, BL& P’s customers all paid a charge of $3 per month for domestic service, excluding value added tax (VAT), base energy and fuel charges.

After the last rate hike took effect on March 1, 2010, the monthtly VATinclusive rates increased to $6.90 for customers using up to 150 kWh, $11.50 for those using 151 to 500 kWh, and $16.10 for those using more than 500 kWh. The cost of fuel was then added to bills via the Fuel Clause Adjustment.

“The application is only the second one filed by the company in nearly 40 years requesting an adjustment to its electricity base rates. The last increase in base rates occurred in 2010, over 11 years ago. Light & Power has been able to defer a request for general rate review through careful cost management and process innovations,” BL& P said.

Significant increase in costs

“However, the significant increase in costs and necessary investments, like the new 33 megawatt Clean Energy Bridge plant at Trents, St Lucy, compels us to seek an adjustment in electricity prices. These expenditures are needed to maintain a safe, reliable and resilient electricity service that meets customers’ needs for continued high quality service.”

The company said while the cost of living has increased almost 40 per cent since the last set rates, it “has invested in efficiencies and managed costs such that we are able to make application for an 11.9 per cent increase, substantially lower than the increase experienced by our customers for other goods and services in the same period”.

It added: “There is no ideal time for a rate adjustment and Light &Power acknowledges that with the impacts of the COVID-19 pandemic, customers are experiencing economic challenges at this time.

Symmonds said the application for increased electricity tariffs “must follow a process and that the first step in that process is for the Fair Trading Commission to be satisfied that the statutory requirements that govern the submission of these applications have in fact been met”.

“That entails a review of the application by the FTC. Once that hurdle has been cleared the substance of the application will be publicised and a secretariat to the proposed hearings will have to be created. At that point I am certain that a variety of consultants will also have to be brought on in order to assist and advise the commission,” he stated.

“At some stage after that preliminary work is done I expect that the FTC will publish a formal notice inviting any parties with relevant interest to intervene. At that point any appropriate interventions and objections to the application will have be lodged and the appropriate time frames will be published.

“After that, if the BL& P is still minded to sustain their application the necessary hearings will take place,” he added.

Based on their reaction after the company posted news of the proposed rate increase on social media, Barbadians expressed surprise at the news.

“Why should customers have to pay for your expenses? My bill done gone from $240 monthly to $360,” one customer wrote on Facebook.

Another asked: “Do we not pay for the increases in the cost of oil through the fuel adjustment cost? Help me understand please.”

“Do we not pay more when fuel raise? So how you want to raise the base because of fuel increase if we are already paying for such?” was another question posed.

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