BELMOPAN, Belize, April 21, 2008 – Belize Electricity Limited (BEL), the country’s sole power company, has cautioned that if its request to increase rates is not approved, it could find itself in a financial bind.
After failing to get the 15 per cent rate hike it asked for last month, BEL applied to the Public Utilities Commission (PUC) on April 3, this time asking for a 13.4 per cent increase.
Chief Executive Officer (CEO) and Chairman Lynn Young said BEL has insisted on the increase because the cost of power it had to buy from Mexico’s National Utility, Mexico’s National Utility, Comisión Federal de Electricidad (CFE), had jumped from US$0.10 to US$0.15 because it is indexed to the global oil price which has now reached over US$115 per barrel.
“It’s costing us a lot of money; we have to be spending out money and we have to find some way to finance this and so we have to go to the PUC and say well listen we need to adjust the rates. Unless we can get lower cost of power from somewhere else we will have to have an increase in the rates,” she said.
“If we don’t get the increase I think somewhere around September, October we are going to have very difficult cash flow problems; we might not be able to pay some of our bills…It would just get progressively worse because the outflow, what the company is paying out is more than what it’s taking in.”
The CEO added that BEL has also had to postpone a number of projects in order to stay afloat.
“We were doing we had rural electrification projects and some street lighting projects that we were doing along with the Government of Belize and we’ve explained to the government that we would have to hold off on these until we get through this situation,” Ms. Young said.
“To this point that is the only effect on customers. Obviously if we have difficulty paying our bills we could run the risks of CFE stop supplying us and that sort of thing but we hope we don’t get to that point.”
The PUC will continue to accept public comments on the rate hike request until tomorrow, April 22 and issue its initial decision to BEL and the general public on May 2.
If either BEL or the public is not satisfied with the judgement, they will object to it and the PUC will get an independent expert to review it before making a final ruling.
A final decision must be handed down by the end of June since the new tariff period starts on July 1.