BLPC wants a fixed rate – Barbados Today
The Barbados Light and Power Company (BLPC) wants utility regulators to allow it to recoup more of its fixed costs by charging consumers a flat rate.
The announcement was made Thursday by Director of Regulatory Affairs Dr. Adrian Carter during testimony before the Fair Trading Commission (FTC) on the 12th day of a hearing for a base increase in electricity rates for clients.
Interviewed by BLPC lead counsel Ramon Alleyne, King’s Counsel, Dr Carter told the panel of commissioners that the proposal, if granted, would send a more accurate pricing signal to consumers and also engender greater fairness between customers.
He also provided the commission with details on how domestic customers will be protected.
“We protect domestic service customers on many levels. At the first level is the distribution of the total revenue requirement between the domestic customer categories. We have made the decision not to require full cost recovery of the Domestic Service Category service. We ask the commission to always give the domestic service class some form of subsidy in terms of income allocation,” the witness said.
“At the rate design stage of rate development, we also sought permission through a regulator application to allow us to limit rate increases for approximately 80% of our customers in the class domestic service not to exceed an eight percent increase.
“We are also seeking to limit the increase to customers who consume less than 150 kilowatt hours [of electricity] and that their increase does 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 said.
Dr. Carter also identified the group of customers who should bear the costs of concessions to domestic consumers.
“Our business customers will continue to provide a level of subsidy to our domestic service customers. This is our proposal. When I talk about commercial customers, I am talking about general service customers who are served at the general service rate, the large power rate, the secondary voltage rate and the hourly rate. Thus, we propose that a level of subsidy continue to be provided by these classes but at a reduced rate. We are in fact proposing that the double subsidy be reduced, but a level of subsidy continues for domestic service customers,” he revealed.
The BLPC executive said the company is also proposing to bring the fuel clause adjustment back to its original purpose of recovering the cost of fossil fuels for power generation, recovering the cost of a storage system five-megawatt battery plant and the purchase of renewable energy generators.
“And to do this, we are proposing to move the battery storage recovery from the fuel clause and into the rate base, and we will implement the energy purchase power adjustment clause renewable as a separate clause. We will remove this from the fuel clause and place it in a separate clause to recover the purchase of renewable energy from renewable generators,” the witness said.
The regulatory affairs manager said this would significantly improve transparency around the adjustment of the fuel clause, which electricity users are concerned about.
“We are putting it back in this state to recover only the cost of fossil fuels. We see that as an advantage of this proposal,” he testified.
Dr Carter said the company also saw the benefit of introducing its Revolving Purchasing Power Adjustment (RAPP).
He said it was an important barometer for the country to gauge how quickly it is moving towards the government’s policy target of 100% renewable generation by 2030.
Cross-examined by intervenor Stephen Worme, who represents the Barbados Renewable Energy Association (BREA), the BLPC Executive agreed that there were other customers outside of domestic service who were struggling and would also have need a facility.
“Have you identified any fallout in those areas where there may be people who are already struggling to maintain the level of payments required in some of these tariffs? Have you looked at this and seen if there are other areas that have little or no cost but have a big impact on the individual consumer? asks the speaker.
Dr. Carter replied, “In business class, the fare impact is actually around 20% for some customers. The main reason is that we have some customers, especially on the secondary voltage tariff, who have the service, but they don’t use [it]. They use very, very few kilowatt hours. But by increasing the usage charges, they actually see a big percentage increase in their bill, just because of the usage charges, because they’re using very, very few kilowatt hours on the grid.
“We will contact some of these customers to see whether or not some of these customers will be able to switch to a different rate. The challenge we have here is that because of the way our tariffs are structured, we recover approximately 75% of our fixed costs through the various energy charges. This means customers like those that we have the infrastructure to supply them with electricity but they are not using the electricity, we are not able to recover that fixed cost, and therefore, other customers have to bear the burden,” the witness said. underline.
The hearing is due to end on Friday, but the chairman, Dr Donley Carrington, has indicated there is no definitive position on the matter, ruling out the likelihood of the proceedings being prolonged.