The country’s main power company has warned of a rise in the fuel surcharge following a decision yesterday by the Fair Trading Commission (FTC) to set a fixed temporary rate for the power sold to Barbados Light & Power (BL&P) under the Renewable Energy Rider (RER) programme.
The FTC said the decision was taken to increase the capacity limit under the RE to 500 kilowatts from 150 kilowatts and set a temporary RER credit at $0.416 per kilowatt-hour for solar photovoltaics and $0.315 per kilowatt-hour for wind, “until such time as a permanent rate may be established”.
In a statement released today, BL&P said it supported the FTC‘s decision, saying it was “fully satisfied with the process and the outcome”, and that it would ensure it was compliant with the motion.
However, it said the Fuel Clause Adjustment designed to help it recover the cost of fuel oil used in the generation of electricity, would rise.
“At current oil prices, the new RER rate will cause a small increase to the Fuel Clause Adjustment, but we will work hard to minimize the impact for all customers as the programme grows,” the BL&P statement said.
The utility company said it remained committed to working with both the Minister of Energy and the Division of Energy, as well as the Fair Trading Commission, the Barbados Renewable Energy Association (BREA) and other stakeholders “to find the right energy solutions for Barbados”.
It also said it was mindful that only one per cent of its customers benefit directly from the RER, with the remainder being non-renewable energy customers.
Meanwhile, BREA welcomed yesterday’s FTC decision, saying it offered greater opportunity for ordinary Barbadians to invest in renewable energy systems.
“This decision offers certainty for investors under the existing RER programme in relation to securing a stable return on investment now that there is a fixed rate which is delinked from the Fuel Clause Adjustment,” the president Aidan Rogers said.
He added that the association had appealed to Government for a temporary price floor of between 40 and 45 cents per kilowatt-hour after it was faced with a situation where members’ businesses were “crawling to a standstill” due in part to the sharp decline in crude oil prices.
“It was noted that investment had almost come to a halt because of inadequate incentives for investors and finance companies such as commercial banks and credit unions,” Rogers stated.
Minister of International Business, Industry, Commerce and Small Business Development Donville Inniss also welcomed the decision.
Inniss told Barbados TODAY that as a result of the FTC’s decision he anticipated more investment in the industry.
However, David Staples, special projects development director of Williams Industries, one of the island’s leading companies in the field, shared a slightly different perspective.
Staples told Barbados TODAY while he welcomed the move, there was need for the rate to be guaranteed for a set number of years in order for individuals to secure adequate financing.
He argued that without “a minimum guaranteed time of at least ten years” banks would not finance such projects.
However, he said “the rate of $0.416 cents per kilowatt-hour will help investors in systems that are already installed”.