By Breaking Belize News Staff: Belize Electricity Limited (BEL) has accumulated nearly $30 million in additional electricity costs that have not been passed on to consumers, according to Executive Chairman Lynn Young, who says the Government of Belize has been providing financial assistance to prevent even larger increases in electricity rates.
Speaking during Wednesday’s virtual press conference, Young explained that electricity purchasing costs have exceeded the amounts BEL is permitted to recover through its regulated tariffs, creating a substantial financial burden for the company.
Under the regulatory framework, legitimate electricity purchasing expenses can be recovered through consumer rates, subject to review and approval by the Public Utilities Commission (PUC).
However, Young said BEL and the government have been attempting to avoid passing the full cost of recent international energy shocks on to Belizean households and businesses.
He explained that the nearly $30 million in unrecovered costs could otherwise be carried forward for recovery through future electricity rates.
Instead, discussions with the government have focused on financial arrangements that would allow BEL to address those costs without imposing the entire burden on consumers.
Young disclosed that government assistance has included loans and capital investment in the company, but said the precise amounts and how they will ultimately be treated remain subject to discussions.
During the press conference, he was questioned about the government’s proposed $73 million investment through preference shares and whether previous financial assistance would be deducted from that amount.
Young said the treatment of those funds had not yet been settled and indicated that some government assistance could remain as loans to be repaid when BEL’s financial position improves.
He also acknowledged that he did not have a complete breakdown of the government’s contributions available during the press conference, but said the information could be obtained from the company’s financial records.
The chairman maintained that BEL’s financial difficulties are being driven principally by external factors, including rising international fuel prices, higher electricity import costs, reduced hydroelectric production and the need to operate more expensive local generators.
He said the government has been attempting to balance BEL’s financial stability against the wider economic consequences of electricity price increases.
Young warned that higher electricity costs would affect not only households but also businesses, transportation and the general cost of goods and services.
BEL is now seeking permission from the PUC to increase the maximum monthly Cost of Power Adjustment from 5% to 10%, although Young emphasized that even the higher ceiling would not recover the full additional cost of electricity generation and purchases.
He said the company’s longer-term strategy is to reduce those costs through new solar generation and battery storage, rather than continuing to depend on government assistance and higher electricity charges.
The post BEL faces nearly $30 million in unrecovered power costs as government intervenes to prevent steeper electricity rate hikes appeared first on Belize News and Opinion on www.breakingbelizenews.com.
By Breaking Belize News Staff: Belize Electricity Limited (BEL) has accumulated nearly $30 million in additional electricity costs that have not been passed on to consumers, according to Executive Chairman Lynn Young, who says the Government of Belize has been providing financial assistance to prevent even larger increases in electricity rates. Speaking during Wednesday’s virtual
The post BEL faces nearly $30 million in unrecovered power costs as government intervenes to prevent steeper electricity rate hikes appeared first on Belize News and Opinion on www.breakingbelizenews.com.
