Chairman of the Public Utilities Commission John Avery has been making the media rounds this week. He's been on a number of morning talk shows - and addressed the rotary lunch yesterday.
And right that he should because according to the former owners of BEL - the PUC June 2008 ruling is what precipitated the entire financial mess.
Not surprisingly, Avery disagrees. But he does agree that 36 million dollars in corrections that the PUC ordered against BEL in 2008 is what did start everything.
He told us why that 36 million dollars was so important…
Jules Vasquez
"Explain how this 36 million that first came up in June of 2008 factored into events in June of 2011?"
John Avery, Chairman of the Public Utilities Commission
"Well Jules from the time we made that decision BEL insisted that because of those corrections we made and the result rates that came out of that exercise that they could not continue to run their operations on the rates and the revenues that they were generating at the time. And basically what they did in our opinion since then is to embark on a strategy to drive that point home by any means necessary and it culminated basically in them placing the company in a serious cash flow position that they were unable then to pay their bills that accrued. Now BEL's or FORTIS' this is that - they believe that they deserve this 36 million and their actions over the last three years have basically said that we will do whatever it take to force in a situation where you have to give us this 36 million dollars and so what has happen is that BEL has intentionally under reported its profit so that it becomes a credit risks in the eyes of financiers and so now the banks write letters to them saying 'I can't lend you any money'."
Jules Vasquez
"But it makes no sense for them to have done that. Every company wants to maintain as stable a profile as they can. Why would a company induce as you are suggesting itself into visualization on its accounts of near bankruptcy?"
John Avery, Chairman of the Public Utilities Commission
"Well basically to force government - you see the request they made of government 'we want you to legislate a rate increase above PUC head or we want you to continue to put money into the company'."
Tomorrow, we'll have more of our interview with Avery as we discuss with him whether rates can or will go down now that government owns the power company….
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