Customers to Pay More for Electricity

The Grenada Electricity Services Ltd. (GRENLEC) wishes to advise customers that effective 1 February 2014, there will be a moderate non-fuel rate adjustment for electricity.

The rate will increase by 0.77%, which represents an adjustment in the net of a rate increase of 1.22% that was applicable for 2013 and a decrease of 0.45% that is due for 2014 based on the Consumer Price Index (CPI), as gazetted for 2012.

To demonstrate the impact on customers’ bills, we present these samples:

Customer Category

Units of Electricity Used

Non-fuel amount paid

Total Increase

Domestic

170

72.40

56¢

400

170.36

$1.32

Commercial

1,500

688.95

$5.25

15,000

6889.50

$52.50

 

Understanding the economic conditions that prevail, we regret that this increase is coming at this time. However, we believe that it is more practical to implement small rate increases than to delay, thus risking the possibility of a higher rate increase at a later stage.

Our Company has always been cognisant of the impact of rate increases on our customers and in 2008, 2010 and 2013 GRENLEC sacrificed revenue by deferring increases in order to ease the burden on our customers. However, we cannot always absorb all the increased expenses and still maintain the quality service that our valuable customers have come to expect.

GRENLEC does not and cannot adjust rates at will. In 1994, a Price Cap Formulae (RPI -2%) was introduced to regulate the adjustment of non-fuel rates. This price cap regime governs how rate adjustments are calculated and prevents GRENLEC from increasing rates to make profit. It also prevents GRENLEC from passing on costs resulting from inefficiencies to our customers.

Before a rate change can be implemented, an application must be made to Government and allows 120 days for response. In some years, through this process that allows for dialogue, the Company has made the decision to delay or not implement a rate increase that was due.

Even with the non-fuel rate adjustments over the years, since the introduction of the Price Cap Formulae in 1994, the non-fuel rate has had a small impact on increases in overall electricity costs compared to fuel. In 20 years, the non-fuel charge has increased by about 4 cents, while the fuel charge has increased by more than 40 cents, as shown below.

 

Fuel and Non-Fuel Rate Comparison 1996–2013

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The new non-fuel charge will apply to electricity used from 1 February.

Bills issued in February, for usage in January and February, will bill the January portion at the old rate and usage from 1 February at the new rate.

The Caribbean Electric Utility Corporation (CARILEC) provides an annual comparison of members’ rates. According to the last surveys of 2011 and 2012, Grenada’s electricity rates were about mid-range in the region.

The Grenada Electricity Services Ltd. (GRENLEC) continues to take seriously its responsibility to provide reliable energy to our customers, while managing costs that it can control.

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