BEL’s Chief Executive Officer Responds to Recent Court Action by PUC
The Public Utilities Commission and Belize Electricity Limited have since 2008 been engaged in a drawn out dispute over rate increase. That difference has led to legal action being taken against PUC in the form of an injunction granted to BEL by Justice Minnet Hafiz in March of last year. Recent court action finds BEL pleading not guilty to violating an existing agreement to submit a Full Tariff Review Proceeding to the Commission. While there are legal implications for not doing so BEL maintains that it is willing to sit at the table with PUC and the Government of Belize to arrive at a favorable solution. Speaking on behalf of the energy provider is its Chief Executive Officer Lynn Young.
Lynn Young; Chief Executive Officer, Belize Electricity Limited
“We submitted all the information that the PUC requested. We submitted the projections which are part of the tariff review and normally what would happen is that the PUC would then set up a meeting with us to agree on a public notice for the tariff review. This would include things like when they want to have a public meeting for the public to participate. We did not get a response from the PUC when we sent in all our information; nothing at all. We assumed that they probably, as we said in our letter, realized that it does not make any sense to go through tariff review under the circumstances. Seems like we were wrong; we did not get a response because maybe we were being set up. I don’t know. We suddenly got this summons now saying that we did not do a tariff review when the only thing that we did not do is to put out a public notice which we could not do anyway without the PUC’s cooperation.”
According to Young the Public Utilities Commission is requesting a decrease in electricity rates as a result of lower oil prices. That would mean the company refunding some thirty million dollars to its customers.
Lynn Young
“We had made a proposal to the PUC and that we are having these savings now because of the hydros coming on line and the oil prices going back. It is a simple matter for the PUC to say we made a mistake we should not have forced you guys to refund about thirty million dollars. We pointed out to them that if we were to set that off against the savings now then there is no need for an increase in rates. In fact, in a going forward base there might even be a small decrease in the rates.”
Returning that amount of money, says Young, would leave BEL in fiscal deficit.
Lynn Young
“If we had to pay back thirty five million dollars to customers right now the banks would probably cut our credit further. Nobody would lend us money because the business would be unsustainable. Like what happened in 2008 the government might have to come in and bail us out.”
BEL, for its part, seems stuck between a rock and a hard place as there have been concerns raised about government’s interest in the company.
Lynn Young
“The question is, do you want a privately owned company or do you want a government owned company? If you want a government owned company there are no issued but I mean get it straightened out. The important thing is the keep the electric service to the customers regardless if it is going to be government owned or privately owned, foreign owned or locally owned. As far as we are concerned as a management; that is for the shareholders and the government to fight about.”
BEL’s bone of contention with PUC is that it keeps reneging on agreements made between both parties.
Lynn Young
“What we need now is to have some kind of stability in the sense that some assurances that once decisions are made somebody just can’t come and change the decisions. We ended up in a situation where our bankers started to withdraw their credit because they are sending us money based on the business plans and the regulations that are in place. If you are going to change them retroactively then they won’t want to lend you money based on what you are saying when five years from now they might go back and change things retroactively.”
If found guilty BEL, more specifically its CEO, can be fined ten thousand dollars; six months in prison or both. Source: LoveFM
