The Coalition of Concerned Cooperatives says it is shocked at the decision by the Fair Trading Commission to grant an interim rate increase to the Barbados Light & Power Company.
At a news conference on Saturday, Chief Executive Officer of the FTC Dr Marsha Atherley-Ikechi said that the interim rate had been granted to the utility provider, while the substantive application for a rate increase will be discussed during a series of hearings planned for the Accra Beach Hotel beginning on Wednesday.
Below is the full statement from the Coalition:
The Coalition of Concerned Cooperatives is shocked at the decision by the Fair Trading Commission to grant an interim rate increase to the Barbados Light & Power Company three days before the substantive two-week Rate Hearing is due to commence.
In addition to the unfortunate message that this decision sends to the general public, and to intervenors in the substantive Hearings, about the Commission’s seeming predisposition towards the Company’s application, we are also particularly displeased that the Commission has dismissed, without comment, the position raised by the Coalition in writing to the Fair Trading Commission, that the Laws of Barbados – via the Utilities Regulations Act Chapter 282, in Section 15 (3) specifically directs that:
(3) The Commission shall not grant a request for a review by the same service provider more than once in any year.
In our opinion, this clear stipulation in the Law restricts the BLPC from submitting an additional Interim rate application within the same year, after having submitted their substantive application.
Surely, the acceptance of the BLPC ‘interim rate review’ therefore breaches the Act.
We continue to await a suitable explanation from the Commission as to how they could have ignored this clear stipulation in our Law.
We are furthermore concerned that, whereas the Act makes no provision for any special category
of Rate Hearing such as an ‘Interim Rate Increase’, the Commission in its ruling, went to long, rambling, lengths, to accommodate this request from the Company, citing overseas precedents that would have been based on completely different laws.
At the same time, the Commission has completely ignored and dismissed our position which is a direct and unambiguous extract from the Laws of Barbados that apply directly to these Rate Hearings.
Additionally, the decision to arbitrarily award 50 per cent of BLPC’s request, appears to be based solely
on subjective information provided by the Company. It clearly lacks the kind of scrutiny that is mandated by the Act, and which will apply in the substantive Rate Hearing scheduled to commence on Wednesday.
The records show that whereas BLPC paid less than $10 million per year in dividends to shareholders before the last rate increase, this increased to nearly $50 Million annually since Emera took control of the company. As a result, some $538 Million have been extracted from BLPC since the last rate hearing.
How this company can now claim ‘cash flow difficulties’ and be accommodated with an ‘interim rate increase’ on consumers, is difficult to assimilate from the decision given by the FTC.
We fully expect that Emera will simply increase their annual dividends extractions accordingly, since this matter has not been addressed in the ruling.
Also, to the extent that this so-called ‘Interim Rate’ has not been back dated, we are concerned that its only impact will be to prejudice the substantive Hearing with the preconception that the Company’s case is already being supported by the FTC.
The wisdom of the stipulation in our Law that only one rate application be entertained in any single year becomes quite apparent.
The Coalition calls on the FTC to urgently reconsider this flawed decision, and we reserve our rights in the matter.
Trevor Browne
Chairman
Coalition of Concerned Cooperatives
