One of the intervenors objecting to the rate increase requested by the Barbados Light & Power Company (BLPC) is calling on authorities to urgently review and modernise the utility regulation process.
Spokesman for the Coalition of Cooperatives Retired Lieutenant Colonel Trevor Browne complained on Thursday that “the very simple fact that it has taken nearly two years to fail to adjudicate a straightforward rate review request from the utility, is enough to condemn the whole process to nonsense”.
He argued that the delay in the rate hearing was happening “in a world where prices, trends, shipping costs and other critical factors have been changing overnight”.
Browne further accused the Fair Trading Commission (FTC) of failing to ensure that a number of performance requirements were met since the last electricity rate increase was granted 13 years ago.
“It is obvious that an urgent review and modernisation of the utility regulation process in Barbados is required, and with immediate urgency,” he contended.
Browne recalled that just under two years ago, the Cooperative Coalition, representing the Barbados Sustainable Energy Co-operative Society Ltd, the Barbados Cooperative & Credit Union League, and the Barbados Cooperative Business Association Ltd, applied and were accepted as one of the intervenors in the 2021 BLPC rate hearing application.
He said the expectation, based on the association’s review of the relevant laws governing the process, was that the process would have been completed by May 2022 “and that we would have benefited from the exercise by being able to better guide the co-operative sector’s stated interest in participating in energy investments in Barbados through a better understanding of the processes involved”.
“It is now September 2023, and the hearings blunder on with embarrassing ineptness. There is a clear lack of strategic focus and professionalism, and not even a pretence of evenhandedness in the process. It is patently clear to anyone who has bothered to look, that this approach is outdated, and well past its ‘used-by-date’,” said Browne.
In October 2021, the BLPC made an application to the Fair Trading Commission (FTC) for an 11.9 per cent increase in its base rate.
The regulator granted the BLPC an interim rate increase of between $1 and $3 for domestic service customers in September last year. In February this year, the FTC instructed the utility company to comply with several orders before it could decide on a final rate increase.
BLPC challenged those orders, which prompted a hearing this week that lasted a day and a half. The FTC’s ruling is pending.
“Even more critical than the FTC’s clear inability to complete a basic rate review within the timeframe prescribed by law, a casual review of the financial and operational data – which was only presented publicly by the BLPC in response to request from intervenors – has raised a number of extremely serious questions about the quality of regulation in this critical sector over the past decade,” said Browne.
“While the last rate decision given in 2010 clearly and specifically set out a number of performance requirements for BLPC, the records now show that these regulatory decisions were routinely breached by the company, to the clear disadvantage of customers.
“A very basic summary of the audited financial figures provided by BLPC clearly suggest that something is amiss in the regulatory affairs of the local electricity sector,” he added.
Browne argued that no deep analysis was needed to reach such a conclusion when, in addition to several concerns regarding the company’s inability to meet several performance requirements since the 2010 ruling, it paid hundreds of millions of dollars in dividends while only just under $100 million was provided for its operations, capitalisation and upkeep since 2010.
(MM)
