The Barbados Light & Power Company (Light & Power) refutes recent media reports that since its last increase in electricity base prices in 2010, over twelve years ago, it has not acted prudently in replacing steam generators and instead made a decision to extend the life of its steam generators that was not in the best interest of customers.

The Company considers these comments to be unfortunate, inaccurate and misleading. Light & Power welcomes rigorous analysis of its 2021 Rate Application and accepts and respects the role of all stakeholders in its review. However, productive and useful analysis requires a clear understanding of the facts and it is with this objective that the following clarification is provided.

The Framework
One of the statutory requirements of Light & Power when it applies for a price adjustment is to file its future capital investment plans with the Fair Trading Commission (FTC). These plans present the Company’s best estimate of future sales demand, market conditions and investments in the electricity network over a 20-year period.

In 2009, the Company provided these projections to the FTC as part of its rate review filing and was granted approval for a rate adjustment in 2010, not based on its capital investment projections but based primarily on its financial performance in the 2008 test year.
When filing for an increase in rates, Light & Power must provide a test year which provides a baseline of its operations. The test year consists of a 12-month period used to evaluate Light & Power’s cost of providing electricity service to customers.
In the 2009 rate review, the Company successfully demonstrated that an increase in rates was necessary to provide the revenue required to meet the expenses involved in supplying a safe, reliable service and to attract new capital on reasonable terms.

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