FAQs  
Sec_Picture_6.gif

Rate Review

Why a rate increase now during an economic downturn/recession?

BL&P is a regulated Company and we have to go through a very involved process in order to get approval to revise our base rates. The current rate review process has taken about three years from the first phase of research, through preparation and now to the Hearing. When we began this process, the economy was in better shape. However, this rate adjustment is necessary for us to invest in new plant and equipment in order for us to maintain a reliable and efficient electricity supply and to be adequately prepared as we come out of the recession. We cannot put the application on hold now and still have the infrastructure in place when it is required. The rate adjustment is also necessary to address some inadequacies in our current rate structure.

The Company has never made a loss since 1983 but still feels the need to apply for a rate increase, why?

The cost of one medium speed generator is more than three times the Companys total profit for 2008. Over the next five years we need to replace 3 generators. To do this we will need to raise funds and lenders will only lend if we can prove, through the adequacy of our rates, that we can repay the loans. Our present rates do not provide an adequate return to give them this comfort.

BL&P survived for 26 years without increasing rates, cant the Company just continue to improve its efficiency to achieve revenue gains?

For the last 26 years the Company has been able to avoid applying for a rate increase because of its efficiency improvements and load growth. Unfortunately, these are no longer enough to allow the Company to make the investments required to satisfy customers and meet the needs of our developing nation.

I have heard that the Company has not managed its expenses well as evidenced by the large increases between 2005 and 2008. Is this the reason for the proposed increase in rates?

I have heard that the Company has not managed its expenses well as evidenced by the large increases between 2005 and 2008. Is this the reason for the proposed increase in rates? In 2005, the Company installed two new Low Speed Diesel generators which, since installation, has been saving in excess of $5 million per month in fuel cost which is passed directly back to consumers through the fuel clause adjustment. This saving is way in excess of the increase in maintenance costs due to the operation of these generators. The application for a rate increase is not because of poor management but quite the opposite, it is a result of our commitment to long term planning to meet the needs of our customers.

Why does the Company have to replace the steam plant?

The plant is a 1972 model and has been running since 1976 and is due for retirement. The Company works hard to maintain the equipment but our analysis has identified that it would be make economic sense to retire the steam plant and replace it with modern more efficient diesel units. For more information on the Rate Review click here