Consumers will see a reduction in their electricity bills this month, with the average residential customer saving about $39, Barbados Light & Power (BL&P) Managing Director Roger Blackman revealed on Friday.
According to Blackman, the decline is a combination of savings from the operations of the power company’s Clean Energy Bridge (CEB) plant at Trents, St Lucy, a drop in international oil prices which directly affects the Fuel Clause Adjustment (FCA) – a mechanism used by the utility company to recover the cost of fuel used in the production of electricity – and the reduction in Value Added Tax (VAT) announced by the Government which kicks in this month.
Blackman said since July, BL&P has been seeing the impact of the falling price of oil, which is now in the region of US$90 per barrel from a high of US$119 per barrel in March.
This, he noted, directly impacts the FCA which will see a double-digit decline this month.
“The Fuel Clause Adjustment for August 2022 is 39.0819 cents per kilowatt hour (kWh), a decrease of 17 per cent over July’s FCA of 47.0855 cents per kWh,” Blackman disclosed in a statement issued by the company.
“As a result of the operation of the CEB and the lower international oil prices, for the average residential customer who uses around 250 kWh per month, the decrease in the FCA equates to a reduction of about $24 in the fuel portion of their August bill.”
Households will also benefit Government’s reduction in VAT, from 17.5 per cent to 7.5 per cent, on the first 250 kWh of electricity used.
That, Blackman said, would bring an additional $15 in savings for customers using 250 kWh or more in a month.
“With the VAT reduction factored in, these customers can expect to see a drop of about $39 on their August bill as compared to July,” he said.
The managing director said BL&P was pleased with the performance of its new CEB plant which was commissioned on June 28 and began delivering an overall net decrease in fuel costs from this month.
“For us, the CEB has always represented a commitment to our more than 128,000 customers to stabilise electricity fuel costs and maintain system reliability as the island transitions to a renewable energy future,” Blackman said.
BL&P is in the process of seeking a rate increase from the Fair Trading Commission (FTC), on the basis that it continues to face increasing operating costs.
If granted, it could see residents paying between five and 20 per cent more on their electricity bills.