New at Castalia

Bill on BL&P

NationNews.com - Barbados
by Geralyn Edward, 20/01/07

THERE IS NO EVIDENCE to support claims that Barbados Light & Power (BL&P) is "systematically profiting" from its adjustable fuel charge to customers.

However, while an independent consultant called in by the Fair Trading Commission (FTC) to investigate found evidence of the company overcharging for this component of electricity bills, it also found that for the most part BL&P was undercharging for fuel.

The consultant further advised that the BL&P should be more transparent and tell the public exactly how the fuel charge was calculated.

In findings released yesterday, the FTC said it investigated BL&P's fuel charge because of complaints from the public that the company was using it to boost profits and that this component of electricity bills was higher than it should be because BL&P was using more expensive fuels in its generating plants.

Castalia Strategic Advisors, a consultancy firm based in the United States with offices in France and New Zealand, who did the probe, could uncover no evidence of profiteering by the power company.

Reduced fluctuations

At the end of Castalia's investigation, the consultants found BL&P's method of projecting fuel costs and revenues "reduced fluctuations" in the costs to customers. The consultant noted the BL&P method of arriving at the charge had "not resulted in prolonged periods" where BL&P collected more in fuel charges than it paid for fuel. In fact, Castalia said BL&P tended to get less from fuel charges than it paid for this input.

In instances of "over-recovery" where BL&P collected more from the fuel charge than was required, Castalia told the FTC, the power company should return that money to customers with interest.

"The commission will explore this suggestion further and in the process will evaluate whether the benefits to customers justify any increased administrative and accounting costs," the FTC responded. Furthermore, the regulatory body said it would review Castalia's proposed mechanism and "consider the use of any other alternative methods of calculating the fuel adjustment charge which may provide incentives for improved efficiency".