Energy CEO Says $73 Million to BEL is No Bailout
Is government throwing BEL a lifeline, or making a smart investment to protect consumers? That is the debate around the proposed BEL Investment Bill. The Opposition says it looks like a taxpayer-funded bailout for the electricity company. But the Ministry of Energy rejects that, saying the plan is an equity investment meant to stabilize BEL, avoid steep electricity rate hikes and eventually bring returns to government. CEO Leroy Almendarez explains why the ministry says the bill is necessary.
Leroy Almendarez
Dr. Leroy Almendarez, CEO, Ministry of Energy, Public Utilities and Logistics
“I’m glad you asked because remember now BEL buys power. And it buys power not only outside of the country from Mexico, but it also buys domestically from Hydro Belize. It buys from Santander. It buys from ASR. It buys from Hydro Maya. Soon Babcol will come on stream. It must pay its bill. And it must be understood, Shane, that BEL does not make a profit from the selling of electricity. It does not. The cost of power, the mechanism, it tells you that the cost of power should be a pass-through. In other words, if you buy it for – and I’ll just give an example. If you buy it for ten cents, you should be able, when you consume one kilowatt hour cause if it’s ten cents per kilowatt hour, you should with every kilowatt hour you consume you should pay the ten cents. BEL has not been collecting that ten cents, if we use the ten cents. It has been less because BEL is regulated. This Investments Bill is really – it’s an investment, equity investment in BEL because you’re talking about preferred shares. And those shares, of course gets first treatment as opposed to ordinary shares. So what will happen then? It’s an investment where, really, if we get BEL’s operations to where it was in a profitable base, then those shareholders within BEL are supposed to get dividends as well. If BEL was to make a request to the PUC and say, “Guess what? I up – I need to recover up to seventy million dollars that I’ve not been recovering because you’re not allowing me to do so,” you know what the rates would be to do one recovery within a year? To recover all of that, the rates would skyrocket.”
Shane Williams
“So to simplify, while a critic may call it a bailout, in essence it is basically a subsidy.”
Leroy Almedarez
“It’s not it’s not a subsidy- Bridging the gap … because you’re buying shares. It’s an equity investment.”
The BEL Investment Bill is expected to be tabled at the House of Representatives meeting on Friday, August 31st.
Attention readers: This online newscast is a direct transcript of our evening television broadcast. When speakers use Kriol, we have carefully rendered their words using a standard spelling system.
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