The Utilities Raping Barbadian Consumers

First it was water, followed by electricity, based on recent reports Barbadians will suffer another increase in the telephone rate of $1.77 per pricing plan, whatever that means. The biggest of all ironies is the recognition that the Barbados Water Authority (BWA) is owned by government and not regulated by the Fair Training Commission (FTC). Cable & Wireless aka LIME and the Barbados Light & Power fall under the oversight of the FTC. In both cases the PEOPLE lose.

BU can join the esoteric debate by the academics and analysts to argue the merits of hiking utility rates at the hike of a recession. We have always been more comfortable using arguments rooted in commonsense.

Barbadians have had to pay by decree up 60% increase in the water rate. Most Barbadians given the value of water to maintaining our existence would have been persuaded to suffer the increase,  balanced by the argument the BWA was insolvent and in dire need of a overhaul. Prime Minister David Thompson told Barbadians in June 2009 that the increase in the water rate was necessary to ensure the BWA meets its mandate to deliver a quality water management infrastructure to Barbadians. Approaching one year the customer and other support services at the BWA remain abdominal. Minister Denis Lowe who is responsible for the BWA has been silent regarding progress in restructuring at that state body. Last week Barbadians were treated to the news that a consultant contracted by government will recommend the discontinuation of sucks/ pit toilets. Additionally current water zones may have to change.

Is this another case of the chickens coming home to ruse? It wasn’t too long ago when politicians Don Blackman and Trevor Prescod were defending the rights of squatters in the Belle. Other politicians have been known to put politics above the health of the nation by ignoring the growing problem of squatting in water zones.  A lack of leadership in our water management perhaps?

This week the FTC as expected rolled over and accepted the proposal for a rate hike by the BL&P. The company’s position that it needed to beef up revenues to impress its bankers to facilitate development was a winning argument. The argument was reinforced given the reality that it appears to be a cheaper option to borrow than build equity. The Intervenors have hinted at a possible appeal but we all know the PEOPLE have been kicked in the rear yet again. God help us when the price of oil rises and the fuel clause adjustment takes full effect. While the technicians at the University twiddle in a post-Professor Headley period, the government remains ignorant about implementing tax credits to incent Barbadians to develop distributed generation, and Barbadians continue to feel comfortable in old consumption behaviours which is unsustainable. We wait for the next crisis to happen to expose our vulnerability. A lack of leadership in our energy management perhaps?

Finally we have Cable & Wireless aka LIME, the scariest of them all. A company which has raked in millions over the years from our small regional markets dating back to when we were colonies. A company which appears to be protected by regulation, a company which has benefited under the Price Cap Mechanism with the blessing of the FTC. A company which is still structured to deliver best in monopolistic conditions. If ever there was a case which describes what exploitative and opportunistic means, it is the decision by Cable & Wireless aka LIME to increase phone rates at this time.  Bear in mind Barbadians are still awaiting a Decision from the FTC on the “Revised” Reference Interconnection Offer (RIO). The single-day Hearing on the RIO was held many months earlier than the 13 day Hearing on electrical rates, and yet we are still awaiting a Decision on the former.

We live in a world where telecommunications cost is being driven down because of technology and competition. In Barbados the cost seems to be going up. Is it a case of burdening a market with all it can bear given our propensity to yak and our unwillingness to change behaviours by accessing cheaper options of communications? A lack of leadership in our Telecommunications management perhaps?

In all of this the role of the FTC continues to be questioned. To what extent is the FTC forced to consider the socio-economic status of the customer base on which the applicants have to depend for revenue? Barbadians were promised that the role of the FTC would ensure that the utilities were well regulated. Are we happy that we have gotten it right, at whose expense?

How can a David Thompson government deliver on a campaign promise to suppressed the cost of living, when the key inputs in our productive sectors of water, communication and electricity costs are allowed to rise, driven by the marauding utility companies and an inept FTC?

31 thoughts on “The Utilities Raping Barbadian Consumers

  1. The increases in electricity and telephone were a foregone conclusion it was just a matter of how much. For some reason even though I resent them it was the increase in water that really hurt. Not just the 60% increase but being told about the wastage, over staffing, leakage etc. etc. but we want more money…..

    At least with the electricity it ‘seems’ to be a better run organisation. LIME, they made a profit, sent and wanted to send more people home. This was stopped by the BWU, so it was only a matter of time before their rates went up, they’re not going to cut their profit margin willingly. Also as the previous rate freeze was only up to Dec 2009? It was obvious what would happen.

    However I think the main crux of the problem was the increase in fuel, worldwide and the removal of the Govt subsidy (we now know why it was subsidized). That really hurt everyone regardless as to whether you own a vehicle or not. It affected the price of everything. If you look at your electricity bill the energy cost is not to bad it’s the fuel that is the killer then on top of that we pay VAT (LOL! that is not coming of any time soon. However if it was removed I would gladly eat my words.)

    The question is not what the DLP or BLP will say but what we the people have to say and how much will we take before doing something about it or will we just sit and swallow everything and mutter under our breath? After all it is the people of Barbados who voted to put the BLP and then the DLP in office. We the people have a lot of power and we need to recognize, own it and find a good way to utilize it.

    What the solution is in the meantime I’m not sure, other than to be more careful with our electricity use and perhaps encourage the Govt or a private entity to find the funds to develop an alternative energy source. Whatever happened with the Solar house that was built a few years ago?

    With LIME reduce your package, do you really need caller id, call waiting, voicemail?? Maybe it’s time to go back to basics like days of old. Or in fact some people may go cell phone only. But to be honest I’d rather pay this increase for LIME landline than face being charged per call like some places overseas.

    My other concern outside of the topic of this blog is NIS. I’m confused. Under the BLP we were told there was insufficient funds to meet pension needs etc. so we were asked to contribute more and to work a little longer. However nowadays all I’m hearing is NIS funds being used to pay for new Govt buildings, NIS to support this cause, NIS purchasing more shares in Sagicor (which I hope is sound and not another Clico in the making). If there so much NI money lying around, why not give the public a little ease for 4 months or so, leaving a little more money in our pockets, that we can spend and maybe help stimulate the economy? What’s the point of pushing a rent to own housing scheme, when so many people have less disposable income because of the increase in cost of living?

    I just hope after all these increases in cost of living, when people finally get to retire that there will be a pension there for them….all very worrying……..

    Also I’m curious about what the next increase will be… ??

  2. Which political party said its priority was “the cost of living”? [I thought they wanted to bring it down, now I realise it was to carry it up LOL]

  3. Can some person tell me why it is legal for Blp to give an interim bill? This interim bill is an estimate how much electricity you may use. The next month bill comes and there is no evidence that you were over charge or under charge on the interim bill. My interim bill is always higher than the bill read by the meter read.
    If they must have an increase then my meter should be read every month so that an accurate bill can processed. Blp should hire some more meter readers with the millions that you already make with the energy charge and fuel charge.

  4. It is time the mad scientists and other handy men start using sun and wind power to generate electricity. If one has a cell, cut the land line. Lots of people in the US have done that – no land lines. In Jamaica the same thing. Mostly everyone has a cell and no land line, except for businesses.

    Me, I dont have and dont need a cell, just me good ole land line.

  5. @Fair Play: “My interim bill is always higher than the bill read by the meter read.

    Can you prove this?

    @Fair Play: “The next month bill comes and there is no evidence that you were over charge or under charge on the interim bill.

    Sure there is. When the empirical data is available, you are charged the delta of what you should have been charged vs. what you were.

    @Blp should hire some more meter readers with the millions that you already make with the energy charge and fuel charge.

    Two things…

    1. You are, of course, aware that the Company doesn’t make *any* profit on the “fuel charge”. Right?

    2. *All* costs incurred by the Company are recouped from Consumers. Thus, your proposal (hiring more Employees) would result in higher costs to the Consumer.

  6. The comparison of the three utilities is understood, due to timing but not representative of reality.

    – BL&P is seeking more funds, apparently to address the fuel charge profit, mainly for needed redevelopment, that is what I glean

    – BWA’s infrstructure has been ignored for years, we all know that.

    So, now the reality has to be faced that we need improved infrastructure and to do that, they need to charge for usage.

    If not, we only pay it in our taxes anyway.

    Do you WANT to subsidise businesses and pool owners etc?

    – LIME makes huge profits, has earned a huge amount of money out of Barbadians over the years and continues to do so.

    So, why the increase? I can only see this as greed.

    But, as some commenters said, just cut what you do not need, assss priorities and reduce consumtion to suit your budget.

    It is the only way.

  7. Since there’s no shortage of polieticians in Barbados touting her high level of development and how she is reaching 1st world status [whatever that means], NO one should complain. YOU ARE NEARING [1ST WORLD STATUS], so that’s the price you’ll pay for such development.

    Its called the FLEECING of the Sheeple and its going on worldwide under the guise of OIL Wars which only enriches the FEW.

    BUT the people do have many choices…

    1….Use the only resource for which there’s NO rate increase, no fuel surcharge, no delivery fee, no equipment upgrade cost and definitely NO greedy investors. ABSOLUTELY no one has control over that.

    2….Use BL&P et al and shut to hell up.

    3….Don’t use any of them and LIVE FREE!

    Welcome to Huxley’s Brave New World.

  8. @Crusoe

    Seems like Bajans will have no choice but to conserve starting with water as the “drought “continues.

    Next is more job losses from the continuing recession which will make people conserve electricity and get rid of one of the cars and one of the cell phones.

  9. Are there currently any codes being implemented to improve water use efficiency and in the restructuring of the BWA? What about in terms of energy efficiency? I have not been able to follow the happenings in Barbados for a while now.

  10. Statement by Senator Arthur Holder – Spokesperson for the Barbados Labour Party on: Industry, Commerce and Consumer Affairs, and its candidate for St. Michael Central – in response to the recently announce approval of a price hike on electricity.


    “Oh No! Not At This Time”

    “The Barbados Labour Party is of the view that: “now is not the time for any electricity rate hike as Barbadians are already at their limit – having to tighten their belts and make harsh decisions, in the face of the high cost of living and increases in fees, rates and taxes.”

    While the Barbados Light and Power has not had a rate increase for 26 years, it has been adequately compensated by the Fuel Adjustment Charge and has also benefitted from more efficient operations and cheaper capital through Government provided guarantees.

    “Even if there was a case for an adjustment – now is not the time.”

    Small Businesses as well – do not have the elbow room to absorb any more pressure and will be under continued stress to save jobs. The issue is therefore one of timing.

    We feel strongly that if the Barbados Light and Power Company did not get a rate increase at this time, it would not have affected its capacity to function for the next year or two.

    It might only have had to modify its investment programme or find different ways to raise money.

    We regret that the Government has not set a good example, in respect of its increase in water rates and other fees and taxes. Further, it is unfortunate that the Government is not speaking out on behalf of Barbadians families and businesses, who will bear the brunt of this electricity increase.

    Indeed, this DLP administration removed the subsidy that the Barbados Labour Party Government gave to the Barbados Light and Power in December 2007 to shield customers of the BL&P from the full movement of oil prices.

    What is even more alarming, is that having promised the removal of VAT on electricity, the DLP Government – by its silence and actions – has left consumers and businesses exposed to the harsh elements of this increase at this time.

    Even though purporting that it will put people at the center of development, this is yet another in a never-ending-series-of-examples of the ruling party turning its back on the plight of the very ordinary Barbadians households and consumers, it was elected to serve – having of course promised to do something meaningful to address the cost of living.” – Ends –


    The above was released over the weekend

  11. @Alex Fergusson…

    I would be *very* interested in what your Party has to say about the announced increases by LIME for Telephony. Allowed by the FTC under the erroneously programmed Price Cap Mechanism (PCM).

    Anyone know LIME’s Rate of Return? I *know* that it is a lot higher than 10.00%. Almost double, in fact…

    And yet, we’re *still* awaiting a decision from the FTC on the “Revised Reference Interconnection Offer”, which if decided correctly, would introduce true competition to International (AKA Long Distance) Calling.

    Please see the below article I wrote for the Barbados Advocate Business Monday just short of two years ago on this topic. My, how time flies…

  12. @Alex Fergusson

    “While the Barbados Light and Power has not had a rate increase for 26 years, it has been adequately compensated by the Fuel Adjustment Charge”

    To my knowledge BL&P does notprofit from the Fuel Charges, that charge is regulated and depends on the cost of fuel on the world market and the storage reserve levels. Hence why it fluctuates on a monthly basis.

  13. @Alex Fergusson

    Read the political statement you posted. Interesting that your leader would not have made it. The question we have for you and one which Barbadians deserve to know because the FTC was established under your party:

    Why did Ronald Toppin resign as Minister in charge of the FTC!!!

  14. Just heard Moderator Stetson ‘the tueeeesday edition’ Babb chiding a caller for being emotional about the utility rate increases. His point, the increases are negligible in the scheme of things. Of course what he conveniently forgets is we have individuals who have to battle with increases on multiple products and services which are required to survive. It all adds up doesn’t it? To think we have these people on our airwaves. God help us.

  15. David ellis refused to let a caller discuss the BL&P isuue the other day saying the caller had said the same thing before.

    Then stetson babb trivialising the increase by light and power like it is a just a little something.

    They treat BL&P public relations statements like if they are Gospel.

    VOB is making it quite clear that they are carrying water for BL&P and are obviously benfitting financially to take that line.

    If this is how they will compromise journalistic standards and integrity with their radio station pray tell me what will they do IF they get a T.V. station?

  16. Have to take our hat off to the BL&P public relations machinery. It has gone into over drive in the last 48 hours and the local media is lapping it up.

  17. @David…

    But *very* interesting to note Mr. Peter Williams, Managing Director of BL&P, quoted as saying “…[we] would have been satisfied with eight [percent rate of return on rate base]” in Today’s Nation News (page 9).

    Thank you Mr. Williams. *This* is useful.

    Please note that this means the FTC made a mistake in their decision — they didn’t drive a hard enough bargain for those they (supposedly) represent.

    But then, when has the FTC *ever* done its job properly?

  18. Well said chris halsall.

    This tells us everything about those FTC commissioners who made that decision against the people of Barbados.

    OMG for real.

  19. Chris

    Please read the article again,it is quite the opposite to your comments or was this some strange ‘tongue in cheek comment?’

    Sorry I erred in agreeing with you.

  20. @mash up & buy back: “Please read the article again,it is quite the opposite to your comments

    Damn! You are correct. I was wrong — I read it too quickly.

    I must apologise to the FTC for my above comments.

    They didn’t err in this case.

    Damn… Damn… Damn….

  21. Hants, how about the Government also doing a review of their electricity usage, at all premises.

    Eliminate all usage after 5pm every day, except for critical use or emergency use (emergency services would include Hospital, Police, Fire, of course).

    I expect there would be some usage savings, therefore bill reduction, plus fuel savings, reducing import bill.

  22. David can you revise the paragraph of the article

    “Is it a case of burdening a market with all it can bear given our propensity to yak and our unwillingness to change behaviours by accessing cheaper options of communications? A lack of leadership in our *energy* management perhaps? ”

    Perhaps you should mean “Telecommunications” instead of energy for the paragraph mentioning the Telecom giant. Just a heads up David.

  23. Hi, I’ve been trying to find the BWA’s annual budget, which is supposedly public. Can anyone help me finding it?
    Thanks a lot

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