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BEL says BELCOGEN overcharging for electricity Print E-mail
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Thursday, 12 April 2018 00:00

Belize Electricity Limited and Belize Co-Generation Energy Limited (Belcogen) are in a commercial dispute over the rates that the nation’s electricity company is paying for the power to the ASR/BSI company for the national electricity grid. That dispute has landed in court, which will determine if Belcogen is justified in the bill it has given BEL.

Readers are aware that Belcogen is the sister company to the Belize Sugar Industries Limited (BSI), which is also owned by American Sugar Refineries (ASR). It produces energy from bagasse, which is a bi-product of the sugar production. Belcogen and BEL have a power purchase agreement which dates all the way back to 2007, and in this arrangement, BEL purchases some of that power that Belcogen produces, and that power becomes a part of the national grid, which you the readers, make use of in your homes and offices.

The press has learned that BEL disagrees with the amount of money it is paying to Belcogen for that power. The company says that between 2015 and 2017, it paid 47 million dollars to Belcogen for that power.

There is a suggestion that it has a co-relation to the dispute which has landed the two companies in court. Last year, BEL started withholding approximately $713,000, which Belcogen said it owed them for power over that 2-year period. All the details of this payment have not been revealed publicly, but it is known that the two companies went into “Mutual Discussions”, to try to resolve it privately between themselves.

BEL says that Belcogen ended those discussions and referred the dispute to the court.

Eamon Courtenay, Belcogen’s attorney, spoke with the press on Tuesday, April 10, and he provided some context for the court dispute by explaining his understanding of BEL’s position in the dispute. According to Courtenay, BEL’s position at this time is that the tariff set out in the power purchase agreement was not approved by the Public Utilities Commission, and therefore, this tariff is invalid. Therefore, they stopped paying the correct rate.

Courtenay said that, as per the terms of the Power Purchase Agreement, a dispute like this is to go to arbitration. Belcogen invited BEL to agree to an arbitrator. They didn’t and so, Belcogen went to court. Extended arguments were made by attorneys for the two companies. The Public Utilities Commission (PUC) applied to join the case so as to stop the dispute from going to arbitration. Justice Courtney Abel dismissed that application, and ordered last month that the matter is to go to arbitration.

The two sides have now agreed that the arbitrator to be chosen is former Court of Appeal Judge, Dennis Morrison.

Separate from this route that will be taken to resolve this dispute, BEL has announced that it has requested that the PUC review the rates being charged by Belcogen. They believe that Belcogen, “has been unable to satisfactorily provide a justification for its rates, which are considerably higher than the Power Purchase Agreement between the two parties.”

Courtenay, Belcogen’s attorney, has told the press that this matter is also something that the arbitrator will be looking at for the dispute that has landed in court.

He said, “To the extent that the dispute applicability of the escalator, that is a matter that the arbitrator is going to interpret the formula set out in the power purchase agreement, confirm, in our view, that the rate and tariff is correct, confirm how the formula is to be applied, and that in fact the rates that we have been charging to BEL are correct.”

It is not known at this time how the arbitrator’s ruling will affect the PUC’s review of the rates in the Power Purchase agreement, which will take place at a later date.

BEL says that they paid Belcogen the $713,000 they were withholding on the condition that it is without prejudice to their position. BEL is confident that if the PUC’s review of the rates set out in the power purchase agreement is favorable to them, Belcogen will have to reimburse them for all overpayment, which will include this same $713,000 in question.