Light bill ease for July and August

Barbadians can expect an ease in their electricity bill this month and next month, due to a five per cent decline in the Fuel Clause Adjustment (FCA) for the month of July and fuel savings from Barbados Light & Power Company’s Clean Energy Bridge plant, which is now in full swing.

The FCA for July is 47.0855 cents per kilowatt hour (kWh). This is down from the FCA of 49.563 cents for the months of May and June.

The FCA, which is directly impacted by international oil prices, is a mechanism used by the electric utility company to recover the cost of fuel used in the production of electricity.

The FCA is calculated monthly as the sum of the previous month’s cost of energy purchased and cost of fuel consumed, plus any cumulative over and under recovery divided by the kWh sales of the previous month. The cost of energy purchased includes energy purchased from renewable energy resources.

“Electricity customers should already be seeing lower bills from as early as this month, as a result of the reduction of the fuel clause adjustment by five per cent on July bills,” said Managing Director of the Barbados Light & Power Company Roger Blackman.

Noting that Government’s proposed reduction in the Value Added Tax on electricity bills from August should also bring about a further reduction, Blackman said customers could expect even further savings due to the company’s efforts.

During an address to the nation on Thursday, Prime Minister Mia Mottley announced that effective next month, the VAT on electricity bills for residents will be lowered from the current 17.5 per cent to just 7.5 per cent up to the first 250 kWh, for a six month period.

“Light & Power expects even further reductions on electricity bills for customers in August. This time it would be the fuel savings from our new Clean Energy Bridge plant in St Lucy. The new plant was commissioned on June 28, and is currently in operation,” he said.

“However, to sustain this, the company will require sufficient funding to pay for its capital investments and to meet its operational costs,” said Blackman.

The investment in the Clean Energy Bridge plant totalled more than $130 million.

The Barbados Light & Power Company is currently in the process of seeking an 11.9 per cent rate increase from the Fair Trading Commission, as it continues to face increasing operating costs. If granted, the increase could see residents paying between five per cent and 20 per cent more on their bills. (MM)