While consumers’ light bills went down on New Year’s Day, there are a few amendments that the Public Utilities Commission made to keep things balanced between consumer and supplier. Last week Love News reported that the reduction will be roughly eight percent, there will be some minor changes. Engineer in the Electricity Sector of the Public Utilities Commission, Derrick Davis, says that there were only a few categories where people will pay a penny more per kilowatt hour, and today, January second, the Commission released its final decision on energy tariffs.
DERRICK DAVIS
“The initial decision, as you remember was done late last year but now the Commission has released that schedule which is final. With this final schedule, the same concept applies; the Commission had decided on a four cent reduction in tariffs, approximately 8% reduction and that same concept applies. However the problem with tariffs is that it is not an exact science to forecast how much energy will be sold in the new year and therefore what the average rate would be depending on the individual rates which we use. So, basically BEL had some concerns saying that, ‘you are giving the 4 cents and the 8% but we do not believe that if you use those initial values that we will achieve the average rate’. So, the Commission listened to what they said and asked us to use the latest forecast from BEL and come up with new figures, if necessary. So, we came up with a few new figures in the residential tariff category, the first bracket was, in the initial decision it was 35 cents now it’s 36 cents; in the commercial one bracket it’s the same thing from 35 to 36 for the first bracket only per kilowatt and for the commercial two bracket, the last bracket which is over 20,000 kilowatt hours it was moved from 44 to 43 cents. Now with those changes it is anticipated that the average tariff will be achieved.”
MARION ALI
“How much of a difference does this convert to when I go to the counter and my bill is a hundred dollars. Previously I would have paid 92, now?”
DERRICK DAVIS
“It’s still approximately 92 because it’s only the first 50 kilowatt hours. So it’s a very small fraction but when you are dealing with rates, those fractions can add up because for example, with respect to BEL’s tariffs one cents change in the average tariff is equivalent to 5 million dollars.”
MARION ALI
“I was trying to get a ball park figure in terms of what BEL will be gaining from these amendments?”
DERRICK DAVIS
“We anticipate maybe about 3 million dollars. So, it means an adjusting from 3 million dollars where they were to this.”
MARION ALI
“The 3 million will be for what? To keep them afloat or?”
DERRICK DAVIS
“The 3 million is legitimate in the sense that we believe that it will achieve the average target rate. In other words we should have done the 3 million but to do it we needed the latest forecast of BEL with respect to how much energy will be used next year by costumers.”
Davis says that the projection for continued cheaper energy is so good that the rates will last for at least six months and possibly for as long as two years.
DERRICK DAVIS
“Definitely for the next six months because going forward for example, BEL is looking at a 2 to 3 cents reduction in cost of power going forward and then they also have additional sales; we expect that this four cent will continue more than six months for a year or two years but we have to do the calculations again in April when we do the Annual Rate Review and then we reconcile everything and then we see what the tariff will be going forward but definitely January to June of 2014 we will be at these rates.”
MARION ALI
“You said 4 cents is 8% right?”
DERRICK DAVIS
“4 cent/8% because the average rate is 4865 and the target rate is 4465 per kilowatt hour.”
The rates will start to reflect in consumers’ next light bill.
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