BEL investigates complaints over sharply increased electricity bills

Belize Electricity Limited (BEL) says it currently owes Mexico’s Comisión Federal de Electricidad, CFE, approximately thirty million dollars for imported power. The figure was among several key updates presented during a press conference held this morning. BEL Executive Chairman Lyn Young said the arrears stood at roughly fifty-five million dollars in January, but the company has since reduced the balance with some financial assistance from the Government.

Lynn Young, Executive Chairman, BEL: “It’s pretty straightforward. The cost of power, in many cases in many months, have been higher than the electricity rate. To give an example the company collects probably about $6 million a week in terms of all the revenue and the diesel alone is over $3 million a week right now. So we have to prioritize paying CFE, paying Hydro Belize, the diesel and of course we have employees that we have to pay, we have contractors that we have to pay. So it boiled down to us using up all the resources and then that’s how the company ended up in that position. We have to bring down the cost of power, right? I think the COP adjustment will help but it’s not like for example last month alone the extra cost was like four and a half cents per kilowatt hour. The COPA is just one and a half cents so we’re gonna have to find an extra three cents which is probably in other words for that month we are probably short of about five million dollars in terms of our collections compared to what we have to pay. And again, open, the government has been assisting us in meeting some of these bills. Quite often CFE would give us rates for the day. During the night, late at night, it might be five, six cents per kilowatt hour US. During the peak hours, it jumps. It’s normally around 30, 40 cents US per kilowatt during the peak hours and sometimes it goes as high as a dollar US per kilowatt. What we do is when it goes to those prices we run the gas turbines as much as possible to avoid having to buy such expensive power. But then the gas turbines like I explained to you are themselves very expensive. We also had some challenges because Belcogen and Santander are seasonal, they operate during the cane season. Now that the cane season is over their production is falling off. So when, and we don’t buy, CFE cannot supply our power by the way.  We only get 51 megawatts from them and our peak is about 130. So we have to have in country generation to meet some of it but when they curtail us we have to find a 51 locally. We bring on the gas turbines like I said, and even with the gas turbines, if they cannot supply anything then we have to resort to load shedding.”

Young said the recently introduced Cost of Power Adjustment, or COPA, will help BEL meet rising energy costs. However, he acknowledged that the additional revenue will not be enough and said the company must identify other sources of funding to maintain a reliable electricity supply for consumers.  Young also addressed how long the company can sustain that dependence and the steps being taken to secure additional and more reliable sources of energy.

Lynn Young, Executive Chairman, BEL: “I’ve laid it out to the government and we’re laying it out to the people that this is the situation that we’re in. The government like I said in the last couple years did not want to see any increase in rates and have been helping the company to meet the costs. We have to keep the lights on. We have to keep the lights on, that’s for sure. So to the extent that we have to do that the government continues to help. The COPA, like I said, would help, but the most important thing is for us to get the cost down. And we have some initiatives that we feel pretty certain within the next year or two it will come down. So in answer to your question, how long ? Until we get these initiatives going or until the war comes to an end and the oil prices start falling back. It’s a challenging situation but like I said we are bringing on this emergency generation, which is also going to be diesel, and then we’re talking to the IPPs about bringing out some solar, some small solar that can be deployed quickly to see if we can bring it down. My experience is that people make the best decisions based on information they have at the time, right? Nobody could have known that CFE is going to start having problems. I wouldn’t have expected that either because it’s such a big system and they’re an energy-rich country. So nobody could have predicted that. So to the extent that we relied on CFE heavily, I can understand why people made that decision. Again, it’s been a while since we added generation to our system. It might have looked like a good decision back then because CFE was cheap and reliable and now when CFE isn’t working. But we all make decisions based on the information we have at the time. So I don’t care to go back and try to see, well that wasn’t a good decision or that was a bad leadership decision. We have to look forward and move forward with what we have now. And you know, you play dominoes? You know what they say, right? You have to play the hand you deal with.”

BEL says its longer-term plans include diversifying the country’s energy supply and increasing local generation to reduce exposure to external disruptions and fluctuating energy costs.