By Horace Palacio:
Look at your August light bill, Belize. There is a new line on it.
It is called the Cost of Power Adjustment, 1.5 cents on every kilowatt hour, approved by the Public Utilities Commission. And buried in the announcement is the detail that deserves your full attention. The true overrun was 4.3 cents. Over six months, power actually cost that much more than regulators budgeted. The 1.5 cent cap is a seatbelt against the full jolt. The rest of the gap has not vanished. It is waiting.
Now, the easy column to write is the angry one. Blame BEL. Blame government. Demand cheaper light by Friday. But you read this column for the truth, so today I will do something harder. I will explain exactly why your bill is rising, why none of it fixes easily, and what the honest way out looks like. Because this problem will not be solved by Belizeans complaining. It will be solved by Belizeans understanding.
Here is the anatomy of your light bill, in three hard facts.
Fact one, our own sources only carry half the load. Belize’s local generation, the dams on the Macal, the co-generation from sugar bagasse at BSI and Santander, supplies roughly 50 percent of what we consume. And here is what too few appreciate, that local half is the good half, low prices, stable, largely fixed. Our problem was never the Belizean half of the bill. It is the other half.
Fact two, we buy the expensive half at the worst possible hour. Our national consumption peaks at night, when families come home, the fans and lights go on, and the country draws hardest. But the sun is down, the dams carry what they can, and so BEL must buy the shortfall from Mexico’s CFE at night, precisely when Mexico’s own rates surge, because Mexico needs that same electricity for its own evening peak. We are shopping at the most expensive store, at the most expensive hour, every single night. And it gets worse. Southern Mexico’s consumption has exploded, Mexico itself now runs short, and matters reached the point where our own Prime Minister had to personally appeal to Mexico’s President not to reduce or cut Belize’s supply. Sit with that, Belize. The other half of our light depends on a neighbor’s goodwill during their own shortage.
Fact three, the backup burns money. To cover the shortfall and our rapidly growing consumption, BEL runs gas turbines. Tolerable when fuel is cheap. But with fuel prices spiking, every hour those turbines spin pushes costs higher. That, combined with peak-priced Mexican power, is the 4.3 cents, itemized.
So there is your diagnosis, and notice something. There is no cartoon villain in it. There is a small country whose demand is growing faster than its own generation, buying the difference at peak prices from a neighbor who is itself running short, and bridging the rest with expensive fuel. These are structural problems, and structural problems yield only to structural answers.
Now, let me also correct something this column must be honest about, including with itself. Solar is not a magic wand. Yes, we live under a magnificent sun, and yes, solar is cheap to generate. But solar produces at midday, exactly when our consumption is low and, usefully, when Mexican rates are also low. Our crisis lives at night, when there is no sun, and bridging solar into the night means batteries, and batteries, at scale, are where solar stops being cheap and becomes a very expensive alternative. Anyone selling you solar as a simple fix for the evening peak is selling you half a story.
So what is the honest strategy? It stands on four legs.
Leg one, put solar where it actually wins, the daytime load. The Central Bank’s own study found our rooftops could hold 169 megawatts of solar. The smartest use of that is not chasing the night, it is serving the day, the shops, offices, schools, factories, cold storage, hotels, and government buildings that consume while the sun shines. Every daytime kilowatt we make ourselves frees up our cheap, stable local sources, the dams and bagasse, to be banked against the evening. Pass fair net billing rules, point the DFC’s renewable energy loans at businesses and homes, and let the private sector build this with its own money, because as you will see below, government’s purse cannot.
Leg two, attack the peak itself. If the expensive hours are the night hours, then the cheapest megawatt is the one we move or remove. Shift what can be shifted into the sunlight, water pumping, ice-making, industrial processes. Push efficient appliances, LED lighting, and time-of-use awareness so families know the evening kilowatt is the costly one. And let batteries enter gradually, where the arithmetic works, storing cheap midday power to shave the priciest sliver of the peak, not to replace the whole night.
Leg three, expand the good half. Our dams and bagasse plants are the stable, Belizean-priced foundation. Grow that foundation, more co-generation from our sugar and agricultural waste, protection of the watersheds that feed the dams, and transparent competitive auctions for whatever firm generation the Least Cost Expansion Plan says we need, every contract published on the procurement portal this column has championed. The Special Electricity Committee’s master plan must come back with megawatts, dates, and deadlines, not prose.
Leg four, keep Mexico as insurance, not lifeline. The interconnection is valuable and we should keep it. But a nation whose evening light depends on a personal appeal between presidents has surrendered something no nation should surrender. Every move above is really one move, needing less of that line, especially at eight in the evening.
And now the part of this story almost nobody tells you, the reason government cannot simply subsidize this pain away.
Belize’s fiscal breathing space is thin, and our inflation is 90 percent imported, meaning most of what squeezes you was priced abroad. Meanwhile, look inside the government’s own budget. Salaries and pensions consume about 60 percent of recurrent spending. Another 10 percent or so goes to labour-related costs, overtime, subsistence, temporary workers, contract cleaning, air conditioning of buildings. That leaves roughly 30 cents of every dollar for everything else, materials, supplies, fuel, operations.
Picture it this way. I hand you 100,000 dollars and tell you to build a 100,000 dollar house, but you must spend 70,000 on labour and only 30,000 on materials. You cannot build that house. Any builder will tell you at least half must reach the materials. That is the government of Belize’s monthly reality. So when people demand tax cuts on power or fat subsidies, understand the arithmetic, every such dollar must come from somewhere, and the only big somewhere in the budget is the public wage bill itself, which no one is volunteering to touch. The GST exemption list was already built broad, with the poor in mind, basic foods at zero or five percent. The easy levers were pulled long ago.
Which is exactly why the way out is not fiscal generosity. It is structural change, private capital on the rooftops, competitive auctions for new generation, peak management, and the patient growth of Belizean-owned supply. Costs that fall over time, paid in ways that stay in Belize.
So here is the whole column in plain words.
Your light bill is rising because half our power is rented at the neighbor’s peak prices while the neighbor runs short, and the backup burns costly fuel. Government cannot subsidize its way out, because 70 cents of its dollar is already spoken for before a single wire is bought. The escape is slower and less satisfying than outrage, build the daytime sun, stretch the stable Belizean half, tame the evening peak, and shrink the midnight dependence, year after year, until the COPA line on your bill has nothing left to adjust.
No villains, Belize. Just arithmetic.
And arithmetic, unlike villains, can actually be defeated, by a country that finally decides to do the work.
The views expressed in this article are those of the author, Horace Palacio, and do not necessarily reflect the views or editorial stance of Breaking Belize News.
The post That new line on your light bill has three causes and no villain, here is the honest way out appeared first on Belize News and Opinion on www.breakingbelizenews.com.
By Horace Palacio: Look at your August light bill, Belize. There is a new line on it. It is called the Cost of Power Adjustment, 1.5 cents on every kilowatt hour, approved by the Public Utilities Commission. And buried in the announcement is the detail that deserves your full attention. The true overrun was 4.3
The post That new line on your light bill has three causes and no villain, here is the honest way out appeared first on Belize News and Opinion on www.breakingbelizenews.com.
