The island’s monopoly power supplier and intervenors objecting to its request for a basic tariff increase have agreed on the proposed issues they want to focus on at the pending rate hearing.
But the Fair Trading Commission (FTC) which conducted a near three-hour Procedural and Issues Conference on Monday announced that the commission will now deliberate to determine a final single list that would reflect the submissions of the Barbados Light & Power Company (BL&P), the intervenors and the FTC.
“The commission will now go away and consider the proposed list of issues that were arrived at during the conference and issue a Procedural Order which will set out the list of issues that the commission has determined it will deal with during the substantive hearing of the application,” acting Commission Chairman Dr Donley Carrington announced.
“The Procedural Order will also contain the agreements reached by the parties in relation to procedure, timeline, deadline, [and] the just and expeditious disposal of the application,” Dr Carrington declared.
A robust exchange of views punctuated today’s conference. These were mainly related to the issues that each intervenor, the BL&P, and the FTC thought were the most critical in determining the final outcome of the main rate hearing, a firm date for which is still to be fixed. While the proposed start date is August 25, the commission is expected to announce a final date because of concerns raised today by several of the eight intervenors who suggested August 29th instead, based on possible clashes with timelines for submission of documents or other crucial information.
Attorney-at-law Ramon Alleyne, who presented the list of issues which the BL&P wants discussed at the rate hearing, identified matters including revenue requirement, the capacity of the proposed rates to achieve the stated objectives, rate design, rate design objectives and philosophy and the appropriateness of the proposed rate of return and revenue allocation for different customer classes. Intervenor Ricky Went suggested consideration be given to an increase in the company’s insurance fund from $8 million to $12 million and a category which the BL&P called other income.
Another objector to the proposed rate hike, was vice president of the Barbados Renewable Energy Association (BREA) and former Chief Operating Officer with the BL&P Stephen Worme Among his list of issues were the impact which the proposed rate hike will have on consumers, the company’s operating performance particularly as it relates to outages affecting its costs and the influence of any renewable energy installations on costs. Chief Project Analyst in the Energy Division and Business Development, Bryan Haynes has proposed a formal dividend policy for the power company that maintains viability of capital and cash flow reserves.Haynes also wants to have discussed, the issue related to the renewable purchase power adjustment and the fuel clause adjustment, where a fair allocation of costs between the utility and prosumers is being sought.”
“By that, we are indicating that the difference between electricity sold with fuel cost added and with fuel cost not included should be taken into serious consideration as it may create an unfair allocation of the cost to process and in particular to the prosumers,” the energy division’s representative told the conference.
Lieutenant Colonel Trevor Browne, who represents the Barbados Sustainable Energy Co-operative Society was adamant that the FTC should set a fixed period to review the rates of the utility company rather than applying a discretionary approach of five years or more.
“The maximum time set is five years. The FTC can set times within five years, but it says, ‘not exceeding five years.’ And yet we are in a situation where more than 10 years have passed and we are still talking about the same principles being used to work out these rates. We are talking about a situation where there has been no review of either rates or the principles. And if that is not a matter of concern, I do not know what is,” Browne contended.
“Those are the major issues that we have. We are also concerned about many of the other issues, but in our estimation, many of those other issues would be non-issues in an atmosphere of transparency and clear methodologies that everyone understood,” he added.
But legal counsel for the BL&P Alleyne responded by submitting that the issues presented by Browne were not relevant to what the conference requires.
“I am guided and I agree with the commission in terms of its earlier intervention during Lieutenant Colonel Browne’s listing of his issues. I do not believe that they substantially relate to the issue that is before the commission for decision, and as such, cannot be set as relevant issues,” the BL&P’s lawyer argued.
However, intervenor attorney-at-law Tricia Watson sought to clarify the submission of Browne while supporting his argument that the FTC should set a fixed period for reviewing rate applications “especially in light of the transitions that are occurring in the sector.”
Among her list of issues was the electric company’s mechanism and methodology for setting rates.
“The applicant has specifically made reference to matters that are principles of rate setting and the applicant cannot at the same time say to intervenors or to the commission, that the intervenors should not be permitted to address the appropriate rate-setting mechanism,” Watson declared.
Also making contributions to the conference were Public Counsel Allison Burke, Samantha Cummins of the Energy Division and economist David Simpson who is a co-intervenor with Watson.
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