BLPC wants fixed rate

The Barbados Light and Power Company (BLPC) wants utility regulators to allow it to recover more of its fixed costs by charging consumers a fixed rate.

The announcement was made on Thursday by the Manager of Regulatory Affairs Dr Adrian Carter as he testified before the Fair Trading Commission (FTC) on day 12 of a hearing for a basic electricity rate increase for customers.

While being questioned by the lead attorney for the BLPC Ramon Alleyne, King’s Counsel, Dr Carter told the panel of commissioners that the proposal, if granted, would send a more accurate price signal to consumers and also engender greater equity among customers.

He also provided the commission with details of how domestic customers will be protected.

“We are protecting domestic service customers at a number of levels. At the first level is the allocation of total revenue requirement among the domestic customer classes. We have taken the decision not to require the full cost of service recovery from the domestic service class. We are requesting of the commission that we still afford the domestic service class some form of subsidy in terms of the allocation of revenue,” the witness stated.

“At the rate design stage of the development of the rates, we also have sought permission through an application of the regulator to allow us to limit the increase in rates for about 80 per cent of our customers in the domestic service class not to exceed an eight per cent increase.

“We are also seeking to limit the increase to customers who consume under 150 kilowatt hours [of electricity] and that their increase not exceed a six-dollar increase in their bills. We believe these proposals will continue to protect our domestic service customers from the full effect of our rate proposals,” he contended.

Dr Carter also identified the group of customers that would have to bear the costs of the concessions being given to domestic consumers.

“Our commercial customers will continue to provide a level of subsidy to our domestic service customers. That is our proposal. When I speak of commercial customers, I am speaking of general service customers that are served under the general service tariff, the large power tariff, the secondary voltage tariff and the time-of-use tariff. So, we propose that a level of subsidy will continue to be provided by these classes but at a reduced rate. We are actually proposing that the double subsidy be reduced, but a level of subsidy continues for the domestic service customers,” he disclosed.

The BLPC executive said the company also proposes to return the fuel clause adjustment to its original purpose of recovering the fossil fuel cost for generating electricity, to recoup the cost of a five-megawatt battery storage system and the purchase of renewable energy generators.

“And to do this, we propose that we will move the battery storage recovery from the fuel clause and place that into the rate base, and we will implement the renewable energy purchase power adjustment clause as a separate clause. We will remove that from the fuel clause and place that as a separate clause to recover the purchasing of renewable energy power from renewable generators,” the witness stated.

The manager of regulatory affairs said this would significantly improve the transparency surrounding the fuel clause adjustment which has been a worry for electricity users.

“We are returning it to that state to only recover the cost of fossil fuel. We see that as a benefit of this proposal,” he testified.

Dr Carter said that the company also sees the benefit of introducing its Renewable Purchase Power Adjustment (RAPP).

He said that is an important barometer for the nation to measure how quickly it is transitioning towards the Government’s policy goal of 100 per cent renewable generation by 2030.

Under cross-examination by intervenor Stephen Worme who represents the Barbados Renewable Energy Association (BREA), the BLPC executive agreed that there were other customers outside of the domestic service who were struggling and would need an ease as well.

“Did you identify any fallout in those areas where there may be people who are already struggling to maintain the level of payments that are required in some of these tariffs? Did you have a look at that and see if there were other areas that have little or no costs but have a big impact on the individual consumer?” the intervenor questioned.

Dr Carter responded: “In the commercial class, the rate impact actually goes up to about 20 per cent for some customers. The reason for that is primarily that we have some customers, particularly on the secondary voltage par tariff, who have the service, but they don’t utilise [it]. They use very, very little kilowatt hours. But by increasing the customer charge they are actually seeing a large percentage increase in their bill, really only as a result of the customer charge because they use very, very few kilowatt hours on the grid.

“We will reach out to some of those customers to see whether or not some of those customers may be able to move to a different tariff. The challenge that we have here is because of the way our rates are structured, we recover about 75 per cent of our fixed cost through the varied energy charges. It means that customers like those that we have the infrastructure there to provide them with power but they don’t utilise the power, we are unable to recover that fixed cost, and hence, other customers have to bear the burden,”’ the witness pointed out.

The hearing is scheduled to conclude on Friday, but the chairman Dr Donley Carrington has indicated that there is no final position on that, thus holding out the likelihood of the proceedings extending.

emmanueljoseph@barbadostoday.bb