And while the variable rate is one change, the PUC has decided to go
outside that new methodology and charge BEL for what are known as extraordinary
corrections. It’s basically forcing the company to compensate consumers,
sort of a rebate for what the PUC feels was unauthorised, unjustified or ill
advised spending by BEL in past years. That means the PUC is going back into
BEL’s books to get them to give you a rebate. For example in the case
of Mollejon transmission facility loan.
John Avery,
“The Commission feels that we have strong moral grounds and strong
legal grounds on which to demand that these corrections be rebated back to customers.
The PUC has always deemed that the Mollejon transmission line facility loan
that BEL took out from BECOL to pay for the Mollejon transmission facility,
which they already own, and the cost of which had already been factored in the
rates being paid to BECOL, which are passed through completely to customers,
we feel that the customers are already paying for that line. And so for BEL
now to reverse that entire transaction and then convert it to a loan to pay
to BECOL, we do not see any benefit to customers in that and as far as we are
concerned it is BECOL and BEL collecting twice for the same facility.”
The PUC is also forcing a rebate for the Mollejon transmission line.
Avery explained that it was a deal with BECOL that BEL should never have entered
into.
John Avery,
“The Commission has already concluded and now reiterates that the
Mollejon transmission line is a form of contributed capital to BEL. The Commission
concludes that the Mollejon transmission line is not in anyway a part of the
regulated asset value of BEL and that BEL will not receive a return on the Mollejon
transmission line through electricity rates.
Again, we felt this line was paid for by BEL at no benefit to the customers.
BEL promised a benefit in terms of a reduction of the rates being paid to BECOL.
Instead we have seen the rates being paid to BECOL increase. BEL already owned
the line, the customers were already paying for it through the rates to BECOL,
we do not feel that the customers should pay for this line a second time. We
also feel that these types of thing contributed significantly to the cash flow
problems that BEL claim they now face. And as I have stated previously, BEL
needs to resolve this issue before they can make a legitimate claim that cash
flow is putting it in an untenable position.
We cannot see any benefit to BEL nor to the customers for that entire arrangement
and so we cannot in our right minds, because if we were a bit insane we could,
but in our right minds we cannot have customers pay for this line again. It
is as simply as that.
So with all that considered, we felt the customers needed to get back what
they paid for that line, since BEL admitted that they were paying for it out
of the rates previously approved by the PUC, the Commission decided that that
$10.3 million that was paid out in interest prior to 2005 must be rebated to
customers.”
In total the corrections, total $36 million. The new rates go into
effect July first.
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