If you've been looking on with concern about the rising cost of living, tonight, you may want to think about ways to cut down on your electricity consumption. That's because the Public Utilities Commission has approved an increase in your electricity rates. Those mean electricity rates will increase from 36.9 cents per kilo-watt hour, to 39.3 cents per kilowatt-hour effective Sunday - and it will remain in effect for two years.
That's a 6.24% increase, still less than the 7.1% increase that BEL was requesting.
At the initial stage, the PUC was only prepared to increase it by 4.4%, but BEL objected, and an independent expert had to be brought in. After the review by this expert, it was decided that the PUC would lean more towards BEL's initial request.
Today, the PUC held a press conference to announce the final decision, and here's how the Chairman described the back and forth to arrive at the final figure:
John Avery- Chairman, PUC
"So, we put out that 2018 ARP initial decision and BEL subsequently objected to the decision. They had, over the two year period, asked for an average rate of 39.25 cents and the Commission had approved an average rate of 38.62 cents; they objected to the decision. The Commission, in consultation with BEL, appointed an independent expert, I think that was done on May 23rd and subsequently he met with BEL with us, reviewed all the objections made by BEL and looked at some other matters that may have had an impact on the initial decision. He produced a report on June 12th, that report of course was shared with BEL. Under the ARP by laws it does not allow for any objections to be made on that report. The report was received, reviewed by the Commission and it resulted in several changes to the values and ultimately the main electricity rate that was approved."
From there, Chairman Avery went on to explain that the reason for this increase is that the initial forecast for the cost of power was lower than what it turned out to be. Avery said that the rates needed to be adjusted in BEL's favor so that it can off-set the unforeseen power cost:
John Avery- Chairman, PUC
"What we did notice, and we actually pointed it out to the independent expert and he did make a recommendation on that regard, is that in our initial decision, when we recalculated the values and the rates for each year, during the 2017 to 2018 period, the period we are in right now, we calculated a rate of about 39 cents from BEL and the current rates right now are a little over 37 cents. So we expect that there will be a short fall in revenues based on the rate setting methodology for BEL in the current period. BEL was asking us to make corrections with regards to the months that were already completed in this year. The independent expert and we agreed that for the last 10 years we have been making corrections for completed periods; so, it is best to continue with that process for now. So, this little short fall that is expected during this year was also considered and that factored in increasing their mean electricity rate from 38.62 cents in the initial decision to 39.3 cents in the final decision. The increase in the mean electricity rate from 38.62 to 39.3 cents basically means that there is an average increase in the current mean electricity rate of about 0.24%."
And so, if you're still not convinced why your light bill has to go up by that 6.24%, we asked Avery if he thinks the rate increase is justifiable, and not slanted unfairly against the consumer. He told us that he believes that the PUC has struck a balance:
John Avery- Chairman, PUC
"I think over the years, in many instances, although I wouldn't say we have bad working relationships with the utilities, from time to time you'd see them objecting to the way we try to execute that mandate. They always want more and we try to be reasonable. In effect, the role of the PUC is to strike a fair and reasonable balance between the consumers and the licensees. So, really when we are setting a rate what we are looking for is a fair rate. I would say we can perhaps improve but we try our best and so we believe that the costumers are not being gouged."
These new electricity rates take effect on Sunday, July 1, and runs all the way up to June 30, 2020.
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