Minister Walter Roban On Electricity Rates

May 23, 2021 | 0 Comments

“With this step in the right direction for energy costs, it is perhaps more important now than ever to increase our uptake of renewable energy so that fuel costs can reduced or eliminated” as “with more renewable energy comes less use of fossil fuel, which accounts for a good portion of every electric bill.”

This was from the Minister of Home Affairs Walter Roban as he was speaking in the House of Assembly on Friday [May 21] “in order to clarify some elements of the recent reduction in electricity rates by the Regulatory Authority [the RA].”

Minister Roban said, “The new rates, effective as of June 1st, are lower than those set last year, which are in turn lower from those in 2019. The most dramatic difference is in the lowest tier of use, which started at 15.75 cents per kilowatt-hour, decreased to 12.81 cents in 2020, and has now been set at 12.53 cents.

“This rate applies to the first 250 kilowatt-hours of use. The second tier, for electricity use of more than 251 kilowatt-hours and up to 700 kilowatt-hours, started at 24 cents per kilowatt-hour in 2019, dropped to 21.72 cents in 2020, and reduced again to 21.24 cents in the new revised tariff.

“These were not the only reductions made, Mr. Speaker. Facilities charges- the tariff charged for the fixed costs of bringing electricity to customers- have also decreased about 3.6% from that which was set last year.

“A customer using 600 kilowatt-hours per month should expect to pay $143.72 for energy- that is the kilowatt-hours used- in the months to come, whereas in 2019 they would have paid $166.33, and up until now, $147.51. ”

The Minister’s full statement follows below:

Mr. Speaker, I rise to take this opportunity to address this Honourable House in order to clarify some elements of the recent reduction in electricity rates by the Regulatory Authority [the RA]. The RA has published their report on the decision and order resulting from their 2021 Electricity retail Tariff Review, dated 13 May 2021. The new rates, effective as of June 1st, are lower than those set last year, which are in turn lower from those in 2019. The most dramatic difference is in the lowest tier of use, which started at 15.75 cents per kilowatt-hour, decreased to 12.81 cents in 2020, and has now been set at 12.53 cents. This rate applies to the first 250 kilowatt-hours of use. The second tier, for electricity use of more than 251 kilowatt-hours and up to 700 kilowatt-hours, started at 24 cents per kilowatt-hour in 2019, dropped to 21.72 cents in 2020, and reduced again to 21.24 cents in the new revised tariff.

These were not the only reductions made, Mr. Speaker. Facilities charges- the tariff charged for the fixed costs of bringing electricity to customers- have also decreased about 3.6% from that which was set last year. A customer using 600 kilowatt-hours per month should expect to pay $143.72 for energy- that is the kilowatt-hours used- in the months to come, whereas in 2019 they would have paid $166.33, and up until now, $147.51. I will provide to Honourable Members copies of some tables, prepared by the RA, to illustrate what the real impact is to an average customer.

Furthermore, Mr. Speaker, businesses will see a reduction in rates varying between 1.4 and 1.8 percent. This is meaningful in these challenging economic times.

Mr. Speaker, I remind Honourable Members that electricity tariffs can only be changed by the Regulatory Authority, regardless of any representations or assertions made by any other party in any other forum. The responsibility of the Minister, as defined by the Electricity Act 2016 [the Act], is to provide policy direction when necessary. It is worth noting that existing policy, particularly as expressed in Section 6 of the Act, specifically states that the RA’s duty is in part – and I quote- “to protect the interests of end-users with respect to prices and affordability, and the adequacy, reliability and quality of electricity service.” These new rates, resulting from this year’s rate review, reflect that purpose, and in fact, reflect the commitment of the 2020 Speech to the Throne. The RA is independent in respect of its processes and its decisions, but, like all regulators, is bound by the covenant of policy as defined in the Act.

Mr. Speaker, while these reductions are welcome news on the backdrop of an increasingly-expensive cost of living, it is vital to recognize the role that fuel costs play in our electricity bills. The RA strives to ensure that those costs are allocated fairly to all customers, and that those costs reflect the true costs of the fuel. For the avoidance of doubt, the utility makes no profit on the importation of fuels.

Therefore, Mr. Speaker, with this step in the right direction for energy costs, it is perhaps more important now than ever to increase our uptake of renewable energy so that fuel costs can reduced or eliminated. With more renewable energy comes less use of fossil fuel, which accounts for a good portion of every electric bill. Finally, Mr. Speaker, we must simultaneously focus on encouraging energy efficiency, which will help control all electricity costs.

Thank You, Mr. Speaker.

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