by Linda Straker
- Daily consumption important factor for increasing bills
- Homeschooling and lockdown measures responsible for hike in electricity bills
- Company has not adjusted its non-fuel rate since 2016
- Fuel rate fluctuated monthly because of oil prices on international market
Clive Hosten General Manager of Grenlec, has explained that increased fuel rate and increased use of energy among customers as they adjust to the new normal of homeschooling and lockdown measures are the main factors responsible for the hike in electricity bills.
Dismissing the argument that Grenlec has increased its nonfuel rate, he said that the company has not adjusted its non-fuel rate since 2016, but the fuel rate fluctuated monthly because of oil prices on the international market.
“Fuel on the other hand is a commodity we have absolutely no control of; we have to adhere to world prices. It fluctuates every day and at the end of each month there is a fuel charge component which is calculated, and this charge is passed on to customers,” Hosten said, speaking as a member of the panel during Wednesday’s post-cabinet briefing.
“So, every month there is a change in the fuel component of the electricity price. When we look back historically, looking back as far as 2019 the fuel charge was around 51 cents, at the end of 2019 it went down to 43 cents. Each month it changes,” he said. Hosten explained that in 2020, the Covid-19 pandemic resulted in a virtual shutdown of most nations for an extended period especially during the second quarter. Oil prices dropped on the world market and that was also reflected in bills. A barrel of oil reached the low price of US$16 in 2020 and the fuel rate for that period in 2020 was as low as 20 cents.
“When we compared a September bill for 2021 to a September bill for 2020, we see an overall increase of about 30%. So, for the energy cost of September 2021, there is an increase of around 30% and that is due to the increase and the changing price of fuel, not the non-fuel rate.” Hosten pointed out the non-fuel component takes care of all Grenlec administration, power plant generation and all our overheads.
Another important factor for increasing bills is daily consumption. “We ask customers to pay attention to their bill and the average energy usage per day, because if your average energy usage per day increases, it means the impact of increasing energy bills is even more severe. The impact is even more pronounced because you have the cost of fuel increase and then you are using more electricity,” said Hosten. “We have seen some increases, in particular, the domestic energy area, and one has to look because it will affect people in different ways. There are some people it might not affect them based on your livelihood and how you operate, some people it might,” while referencing examples. “We look at the no movement weekends: people are at home, when you are at home there is TV, internet, sometimes you in your refrigerator at lot. We look at the situation with schools and students being home,” he outlined.
