By Breaking Belize News Staff: Belize Electricity Limited (BEL) owes Mexico’s Comisión Federal de Electricidad (CFE) approximately $20 million in overdue payments, while the company is also carrying a similar debt to a domestic hydroelectric supplier, Executive Chairman Lynn Young disclosed during a virtual press conference on Wednesday.
Young revealed that BEL began the year owing CFE more than $50 million, but has since reduced the outstanding amount through payments supported in part by the Government of Belize.
However, he acknowledged that BEL continues to face difficulties meeting its financial obligations, including challenges obtaining sufficient US dollars to settle outstanding invoices with the Mexican utility.
Young said BEL has Belize dollars available to meet certain payments but has been unable to secure the necessary foreign currency to complete those transactions.
The chairman confirmed that CFE has contractual authority to discontinue electricity supply if BEL fails to meet a formal demand for overdue payments, although he stressed that the Mexican utility has not directly threatened an immediate cutoff.
Under the agreement, CFE can issue a demand for payment and, if BEL fails to comply within the stipulated period, exercise its right to discontinue service.
Young said discussions between the two companies are continuing, with a further meeting scheduled for Thursday. He also disclosed that Prime Minister John Briceño has been in contact with Mexico’s president regarding the electricity situation.
The financial difficulties have been compounded by a dramatic increase in BEL’s reliance on diesel generation, which Young said accounted for approximately 80% of the company’s customer collections in September.
BEL’s normal dependence on diesel generation, estimated at 2% to 4% of electricity supply, has increased to approximately 18% this year because of restrictions on Mexican imports and reduced hydroelectric generation.
Young further disclosed that BEL is approximately three to four months behind in payments to its hydroelectric supplier, with the outstanding balance approaching $20 million.
He maintained, however, that the company has never defaulted on its debts and continues to negotiate payment arrangements with its suppliers.
The financial pressures come after BEL previously requested an emergency declaration from the PUC over concerns that available generation capacity would be insufficient to meet projected electricity demand.
Despite the possibility of interrupted imports, Young insisted that BEL now has enough domestic generation capacity to supply the country if CFE becomes unavailable.
He cautioned, however, that relying entirely on local generation would be exceptionally expensive because diesel-powered generators would have to operate continuously.
The disclosures provide further context for BEL’s latest application to increase the maximum monthly Cost of Power Adjustment from 5% to 10%, a request now before the PUC for consideration.
The post Belize faces risk of electricity cutoff from Mexico as BEL owes $20 million in overdue payments appeared first on Belize News and Opinion on www.breakingbelizenews.com.
By Breaking Belize News Staff: Belize Electricity Limited (BEL) owes Mexico’s Comisión Federal de Electricidad (CFE) approximately $20 million in overdue payments, while the company is also carrying a similar debt to a domestic hydroelectric supplier, Executive Chairman Lynn Young disclosed during a virtual press conference on Wednesday. Young revealed that BEL began the year
The post Belize faces risk of electricity cutoff from Mexico as BEL owes $20 million in overdue payments appeared first on Belize News and Opinion on www.breakingbelizenews.com.