At the end of 2012 - we told you that electricity rates would be going up 17%. That hasn't changed but the distribution of the increases has. Here's how it works: as a residential customer your rate went up from 41.6 cents per kilowatt hour to an average of 48 cents per kilowatt hour. Well now, it's going up to 49 cents per kilowatt hour.
And that's because Government objected to the rate increase on street lighting. The PUC had proposed increasing that to 64 cents per kilowatt hour - nine cents more than the 55 cents it had been set at.
But Government - the pro-poor government - wrote to the PUC saying that it would rather reduce the subsidy to social rate customers, the poorest customers - and keep the rate for street lighting at 55 cents. We're restrained from making editorial comments, but that one, that's special...
Today the PUC explained why it agreed with the government:..
Dr. Leroy Almendarez, Dir. Tariffs and Admin. - PUC
"The major difference here is the change from in terms the cost - the tariff for street lighting. It went back instead on 54 cents, it's now back at 55 cents. What the government is saying in their comment is that they did not get any relief when it was reduced by 6.14 cents. The government state in their comment that the additional 9 cents per kilowatt hour would then mean additional expenditure when in fact they say they did not get the relief."
"The PUC considers it to be the right of GOB to reduce any subsidies that it provides through electricity tariffs. As such the PUC decided to maintain existing tariff for street lighting that is 55 cents per kilowatt hour which provides a direct benefit to all consumers of BEL which is true and to spread the result and shortfall in expected revenues, because remember, one of the things you must remember if that is reduced or remains the same as 55 cents then it means that if that 9 cents or that amount is not redistributed then the increase would have not been 16.87% and so therefore for it to still realize the level of revenue that it needed there was a redistribution. In some instances some of the rates in the tariff basket were increase by .01 cent."
That's one cent but it's per kilowatt hour. It doesn't sound like a lot but it increases adds up - to about two million in total form what's called the tariff basket. That's how much the PUC had to get from all the other consumers to compensate for government's objection to the higher rate for street lights.
So bottom line is, everyone gets an increase and now a second one cent increase, but government gets none for street lighting. We asked Almendarez, how is that possible?
Jules Vasquez
"Let's say the government - morally if its pro-poor should take more than its fair share."
Dr. Leroy Almendarez
"Government is paying for the street lights. If you multiply 55 cents by total consumption by these street lights and see how much it cost the government. I am not speaking on behalf of the government, the government is not here to defend itself but we are just saying that if those things are on from 6 in the evening to six the following morning - that's a lot of consumption."
Jules Vasquez
"It not the government has the responsibility to bear its fair share or waiver of the burden. I am saying every rate is increased expect the government."
Dr. Leroy Almendarez
"I fully agree with you that a government has the responsibility to ensure that the social wellbeing of its citizens is taken care of. GOB did not shirk its right to pay for street light, it did not do that. It did not shirk that responsibility and I think it's important and here I am not speaking on behalf of the government but you are saying - the commission. The commission made that consideration. One of the things we have to remember, now it will sound like I am speaking on behalf of the government and I am not, there are other obligations. You have to relocate so much more expenditure in order to meet the 9 cents per kilowatt hour. It's not true? You'd have to do that Jules."
Jules Vasquez
"That is their business. That is not my business. That means no new SUV this year."
Dr. Leroy Almendarez
"I think whenever you are in a press conference with the PM again - that's the person to ask."
And, to be sure, we will ask him in due course, but for the time being, Almendarez says the best you can do is make like a monk, and conserve:..
Dr. Leroy Almendarez
"Let me just add that it's important that we encourage consumers to reduce their cost through conservation - that's important. You can reduce your cost, if you consume zero power; you don't pay anything unless there is a base charge. If you reduce your consumption then you reduce your power."
The new rates went into effect January first. They hold in force until June 30th when the decision of an annual review will go into effect.
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