BL&P and intervenors at odds

Some of the intervenors in the upcoming rate hearing for the Barbados Light & Power Company Limited (BL&P) are hitting back at the utility company which denied claims that it did not act prudently or follow through on commitments after receiving the last rate hike in 2009.

In a release on Wednesday, Ricky Went said intervenors were “hopping mad”, following a full-page advertisement by the BL&P, which sought to refute their assertion that it failed to invest in necessary upgrades after the Fair Trading Commission (FTC) gave a rate increase in 2009, and instead continued to use old, inefficient steam generators between 2012 and 2021.

And in response on Thursday afternoon, the BL&P told Barbados TODAY it welcomed the interest being shown in the upcoming rate review process and “respects the intervenors’ level of engagement in the issue surrounding the application”.

“This creates opportunity for sound, public and transparent discussion on critical matters of our business,” it said.

The back and forth comes as the BL&P seeks a rate review from the FTC, for which a hearing is to be held next month.

Intervenors had indicated last week that they intend to question the fairness of the increase being sought by the utility company, given that it has not acted prudently since the 2009 rate hike, and had extended the life of its steam generators instead of replacing them.

However, in Sunday’s newspaper advertisement, the BL&P hit back, saying it considered the comments to be “unfortunate, inaccurate and misleading”.

“Light & Power welcomes rigorous analysis of its 2021 rate application and accepts and respects the role of all stakeholders in its review. However, productive and useful analysis requires a clear understanding of the facts,” it said.

Presenting what it said were the facts, the power company said the granting of a rate increase did not remove its “responsibility and discretion to modify its investment plan in the interest of customers, given its assessment of changes in its external environment”.

Furthermore, the BL&P said it did intend to invest in a new plant by 2012, but “with a rapidly changing business environment and a global and national thrust towards renewable energy”, it felt it prudent to delay the retirement of its steam plant and planned installation of new fossil fuel plant in 2012.

This delay, the company said, gave it the opportunity to develop a “more informed investment plan in response to the new business environment”.

The BL&P said it had consulted with various stakeholders between 2012 and 2014 and developed an integrated resource plan (IRP), and on April 7, 2014, the FTC advised that it was satisfied with the approach and the assumptions made in preparing the IRP.

However, coupled with Government’s plan then to introduce waste-to-energy and biomass generation between 2016 and 2018, and the planned rapid grow the renewable energy sector, the utility company also argued that it felt it prudent to further delay investments in new fossil fuel plant and to extend the life of its steam plant “to avoid the possibility of stranded assets”.

However, Went described the notice by the BL&P as “misleading”, adding that the intervenors were looking forward to an opportunity to cross-examine the company on it.

He argued that the IRP consultation “should conceivably be considered the first serious decision, if any, about not proceeding with replacing the team plant”.

Went said prior to the 2012 to 2014 period there were no arguments to support the BL&P not proceeding to order the new generating plant that would have saved the country some $30 million a year, based on the utility company’s own projections.

“Had the company ordered the new generating plant in late 2009 and commissioned in 2012, the foreign exchange drain would have been avoided, customers would have enjoyed direct savings through the FCA and excessive battery storage would not have been necessary,” said Went.

“Intervenors are anxious to refute other claims presented in the paid advertisement at the upcoming public hearing in order to give the full picture,” he added.

Noting that the concerns being raised by Went were addressed over the weekend, BL&P said it still welcomed the interest being shown but questioned whether Went was simply taking a “simplistic view” on the matter.

“It appears that perhaps intervenor Went has taken a simplistic view of a matter which is very much more than the picture that he is seeking to paint. We look forward to the opportunity at which time we will further clarify our position and actions,” the company said.

“With careful management, Light & Power has held off returning to its customers for a rate adjustment for more than a decade. Nevertheless, the company has continued to invest and modernise. We remain committed to our business, safely providing energy and energy services that are cost-effective and reliable for customers and by extension, the nation,” it added. (MM/PR)