Beijing Water

“PUC broke the law,” Senator Ambrose Tillett

Adele Ramos-Daly
Amandala
January 18, 2006

“PUC colluded with BEL to gouge customers . . . it gave BEL a blank check.”

Opposition Senator, Ambrose
Tillett, has written to the Public Utilities Commission (PUC)
challenging its decision to increase electricity rates and give the
Belize Electricity Limited (BEL) an increase in revenues, purportedly
to pay for electricity costs.

Senator Tillett contends that the rate increase was, in effect,
illegal, since the PUC did not follow proper procedure set out in the
law, in writing the new regulations under which the PUC granted the
rate increase, which took effect on January 1.

As highlighted in this week’s edition of FOCUS, BEL and its sister
company, the Belize Electric Company Limited (BECOL) are forecasted to
supply about 50% of the country’s electricity in 2006. Together, they
will get about 60% of what consumers will pay towards the cost of
power. Much of this would pay for expensive diesel
generation—expensive, according to BEL, because of high oil prices.

However, Senator Tillett accused the PUC of colluding with BEL to gouge consumers.

“The price-gouging of dieseling generation by BEL highlights a more
fundamental failure of the PUC and a recurring theme of the undersigned
– the failure of the Commission to carry out its function given under
section 6(2) of the Electricity Act to promote competition in
generation,” said the Senator. “The PUC continues to collude with the
utility provider to make ratepayers pay costly wholesale power, so that
BEL and its sister company BECOL can extract monopoly profits in the
electricity generation sub-sector to the detriment of ratepayers.”

He contends that the PUC has given BEL a “blank check” to charge
ratepayers for internally produced electricity from diesel-fired plants.

“The PUC must only accept reasonable costs from BEL’s diesel generation,” he added.

Apart from the issue of price gouging, Senator Tillett also
challenged the recent passing of a Statutory Instrument (S.I.) by the
PUC and Minister of Public Utilities, Hon. Ralph Fonseca.
Interestingly, the same day the new S.I. was passed, BEL applied for
its rate increase.“

The S.I. 145 of 2005 is ultra vires of the Electricity Act.
Certainly the PUC must rescind the bylaw and all the decisions flowing
from it,” he said. “Therefore, it means that the order of December 31,
2005, is also improper…”

The pre-existing S.I. only allowed for annual rate adjustments, as
well as adjustments at the full tariff period every 4 years. The new
S.I. allows BEL to apply for rate increase every time the cost of power
projections turn out to be off by $3 million.

However, Senator Tillett contends that new regulations cannot be
made without proper consultation with all stakeholders—which include
ratepayers or those who use BEL’s electricity. He elaborates that the
PUC is required to circulate final draft copies of the new regulations
to “any interested person.”

Without giving a genuine opportunity for all stakeholders to have an input, the PUC has violated the law, he contends.

“In fact, the statute grants discretion to interested persons to
demand a hearing on an issue of importance to them and the public,” the
Senator wrote. “Clearly, the language and the spirit of the statute are
for the PUC to carry out genuine consultations with those being
affected by any bylaw, order or directive, and not to make secret deals
with the utility provider and the minister.”

He also agrees with the argument put forth to the PUC by Candy
Gonzalez, vice president of BELPO – the Belize Institute of
Environmental Law and Policy, that the manner in which the PUC
permitted the process to flow did not allow meaningful public
participation.

The PUC said, for its part, that despite the publication of the
relevant notice by BEL, no one wrote and no one called expressing any
concerns during the required time period of 11 calendar days.

In a letter dated, Thursday, January 12, 2006, Gonzalez said that
the process of public consultation was “a farce.” She said that
Belizeans had a very short time – which she estimates to be 3 working
days, given the fact that it was done during the Christmas season – to
review BEL’s proposals for a rate increase, submitted on December 20,
2005.

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