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That's right, the rate that was reduced to 41.6 cents per-kilowatt-hour one year ago - is now going up to 48 cents per kilowatt hour! That's the upshot of an annual review proceeding which was concluded yesterday. Chairman of the PUC John Avery broke the bad news at a press conference this afternoon:..

John Avery, Chairman - PUC
"The new approved electricity rate is now 48.86 cents which is approximate 16.87% above the existing 41.81 mean electricity rate."

"Because this is a fairly big increase certainly it will put our productive and business sector at a disadvantage comparatively. It's not something we like to do and we try to minimize the impact on consumers while not putting any additional strain on the utility "

And as Avery explained that strain on the utility is because of sharp, unforeseen increases in the cost of power coupled with very low rainfall leading to poor hydro-electric production.

It got so bad that at some points BEL was forced to buy power for 32 cents more than they were selling it!:

John Avery, Chairman - PUC
"The power from BAL was at 73.96 cents per kilowatt hour. So basically BEL was selling at an average of 41.61 cents; meaning that they were losing 32 cents every time they sold 1 kilowatt hour of energy from BAL. From their diesels, the average price was 59.48 cents, from it was turbine, the average price was 60.78 cents. There were some significant losses. All in all BEL is projected to spend some 45 million more in cost of power than was projected up to the end of December 2012."

It's actually 44.8 million dollars in increased cost of power expenses which led to this review of the 2012 decision. The largest part of those tens of millions was paid to CFE - the Mexican Power company - upwards of 90 million dollars to purchase at a rate sometimes exceeding 37 cents per kilowatt hour.

Avery explained how that was the main driver of the increased cost of power:

John Avery, Chairman - PUC
"We never anticipated the drastic increases in power from Mexico. BEL may have been a bit too optimistic in not trying to secure a firm capacity contract from Mexico. Certainly a major factor is the lower rainfall that was experience through the year which had a domino effect and basically forcing us then to buy more power from Mexico at a higher rate. At this stage Mexico sells us power on economic basis only which means basically we pay for their highest rate at the time, so if they have 10 different sources, we pay the rate at the most expensive source that they bring on last. We are hoping and we are a bit optimistic that we should be able to get a more blended cost form Mexico as we have been able to get in the past through diplomatic channels."

As Avery explained, those channels will be pursued when the Prime Minister leads a delegation to Mexico next month to meet with the new President Enrique Peña Nieto.

And so, to review, the average rate will be 48 cents per kilowatt hour and that goes into effect on January first. But those who object to the increase can write to the PUC by January seventh.

BEL may be one of those objectors. Thought it did not ask for any specific increase in rates, it sent in its cost of power figures - and the PUC calculated that the utility was asking for an increase up to 55.7 cents per kilowatt hours. They ended up getting half of that. A release from the company this evening says will review the decision.

And any sober member of the public may want to review last year's decision - which brought the rate down three and a half cents per kilowatt hour right before an election. We asked the PUC Chairman about that:..

Jules Vasquez
"It was at 44 cents. In an election it was reduced to 41.6 cents and now it's being reduced to 48 which more or less evens it out, its slightly over compensated."

John Avery, Chairman - PUC
"It wasn't anything political Jules. As I explain to you, if you look at what we do here we work with the numbers we have."

Jules Vasquez
"FORTIS have been asking, I can't remember the years but for at least 20 months for an increase. They said that they were broke, they had a cash flow crisis, they could not service their debts - are we faced with the same thing? Shouldn't you all have just....."

John Avery, Chairman - PUC
"FORTIS wanted an increased because they wanted to increase their profits. If you notice what we have here is based solely on expected increase in cost of power. There has been no adjustment to any part of the rates that accrue to BEL. These are strictly for cost of power. Under the law cost of power is a direct pass through; BEL is not allowed to suffer any losses from it."

Those with objections to the new rates can send emails to info@puc.bz