Barbadians might soon be paying more for electricity

Nation Newspaper --- THE BARBADOS LIGHT & POWER (BL&P) wants an additional $28.2 million in revenue in its coffers.

And it wants consumers to provide it.

BL&P's lead counsel Sir Henry Forde, QC, told a rate review hearing yesterday before the Fair Trading Commission at the Lloyd Erskine Sandiford Centre that the basic rates Barbadian consumers were now paying for electricity were insufficient for the company to continue providing them with the high quality of service to which they were accustomed.

Sir Henry said the present economic climate could not be used as an issue by objectors to the rate review application, since the BL&P had to operate and maintain its facilities within those same economic circumstances.

He explained that the cost of operations had increased significantly and the company had to make substantial new investments to provide for the present and the future.

Sir Henry added that if the BL&P wanted to continue providing a safe and dependable service, it had to invest to prevent degradation of the system's reliability.

He explained that once the company's reliability suffered, it would take years to overcome the damage done to the economy and customers would not be satisfied with substandard service.

The company is seeking an increase on its rate base from 6.07 per cent to 10.48 per cent, which will represent a return of $544 198 726. Sir Henry said that when examined, the cost of the plant in service was at $937 647 461.

He said the BL&P's request was fair and reasonable and within the range of returns that local companies were experiencing.

He explained the company was servicing 118 788 customers up to December 31, 2008, compared to the 72 962 in 1983 when the last increase in electricity rates was granted. He noted electricity sales in that same period had risen from 317.4 million kWh to 944 million kWh.

But, he pointed out, over the years the company had reinvested 72 per cent of its earnings in its plant and equipment to meet increasing demand and to improve efficiency.