Fair Trading Commission RENEWABLE ENERGY RIDER Consultation

Submitted by St George’s Dragon
The late Professor Oliver Headley would be disappointed with lack of progress in the alternative energy sector were he alive

The late Professor Oliver Headley would be disappointed with the lack of progress in the alternative energy sector were he alive

The Government wants 29% of all electricity consumption to be generated from renewable sources by 2029. That seems ambitious but it is necessary in order for Barbados to help reduce CO2 emissions and help prevent global warming and rises in sea-levels etc.

Barbados Light & Power (BL&P) has been running a pilot study on renewable energy generation for the last couple of years. Under the pilot scheme consumers could install a photo-voltaic panel or wind-power system and get paid for power fed back into the grid.

The Fair Trading Commission has a consultation paper out on the results from the pilot study and the arrangements for the future including what BL&P should pay us for the electricity we generate from renewable systems.

During the two year period of the pilot scheme only 25 customers joined up. That is a tiny percentage of the number of BL&P customers and the response has to call into question the attractiveness of the scheme. If the terms are not made more attractive the Government’s 29% goal would have to be called into question.

I do not believe BL&P’s proposed future arrangements are in favour of the consumer / generator for the following reasons:

  • Proposed payment for generated power – BL&P suggests that payment is reduced by over 10%. Rates should actually be increased to attract more investment.
  • Payment continues to be based on the Fuel Clause Adjustment – BL&P wants to continue to pay us based on the cost they avoid in fuel. While that may represent what they save it is not a reasonable basis for payment for power generated from a fixed, relatively high capital cost system. If fuel costs go down that should not reduce rates paid for power from a consumer / generator when the cost of financing the system is the same.  BL&P has a guaranteed return on investment of 10%. In order to attract investment in renewable energy, the consumer / generator should have the same guarantee.

Alternative options
Stick with a multiplier on fuel cost but fix a “floor” rate so consumer / generators can see a reasonable payback period.

  • Pay consumer / generators a multiplier based on BL&P’s standard customer charge, before the fuel clause adjustment. That would establish a more stable a relationship with BL&P’s costs.
  • Pay for generated power in arrears – BL&P wants to continue paying for your generated power twice a year in June and December (but only if they owe you more than $500). This is unacceptable. If BL&P can charge us on time for the power we use on a monthly basis, they clearly have the systems in place to allow them to repay us for our renewable energy generated on a similar monthly baisis. Why should they earn interest on our money?
    The closing date for responses to the FTC on this consultation is 14 December – so Friday this week.

If you agree with any or all of the above please feel free to copy and paste from this post and email them to the FTC at info@ftc.gov.bb.

0 thoughts on “Fair Trading Commission RENEWABLE ENERGY RIDER Consultation

  1. If the government wants to encourage the right behaviours to ensure aggressive take up of RE solution the usual government sloth but not factor here.

    Why is Bizzy adopting early?

  2. @ St. George’s Dragon

    I like your alternative options to that of the BL&P proposed new options.
    But have you considered the obviously consequential effects of a smaller revenue base available to BL&P as a result of an expanding RE sector? Couldn’t this be the selfish reasoning behind BL&P conservative reaction to the idea of further incentivizing of the RE trailblazers and bandwagon hoppers?

    How will Emera achieve a guaranteed ROI from a smaller profit level and an underutilized generation plant with associated huge fixed costs?
    Wouldn’t a heavier price burden be put on the consumers (mainly poor or small/micro businesses) who are unable to switch to RE?

    I am not referring to the FCA but to the BL&P energy generation component of the electricity bill to existing consumers.
    How will government make up for the loss in VAT arising from a reduced revenue base to BL&P?

    Please note these are not criticisms of your valuable contribution and positively imaginative alternative options but just observations and genuine concerns for the small consumers who are not being given any incentives in this whole RE movement.

  3. may be you can get another country to pay for it all.poor black people.
    come on tricksters get on it.hahaha
    dont tell dem.
    tricky Negroids.
    bye the way you just about 20 years behind with that now.
    brilliant idea.if you are retarded.
    where was this 20 years ago??????????????????????????????????????

  4. in most countries govts regulate power rates charged by power companies.the govt should be able to dictate fair mkt value.private cos here are renting warehouse roof space and install solar panels , they are making money as is the warehouse owner from leasing his roof

  5. @ Harry callihan (sic)
    The men in white coats should be arriving at your house shortly and with the drugs available these days and the innovative treatment now available it is possible that you will make a full recovery.


    Reduced revenue base for BL&P – If BL&P’s revenue decreases, so be it. Government has a renewable energy strategy which may affect BL&P’s revenue and they therefore have to roll with the punches. Don’t forget that they are guaranteed a return on investment under the FTC rules. Not many businesses have that comfort. As you have said, a sceptic would say that BL&P are arguing for a payment regime which does not exactly incentivise people to rush to install systems as this is not in their interests.

    Would small non-RE consumers pay more if RE rates increased? – The current number of 25 RE systems connected to the grid is a joke. The RE credit has to be increased in order to get more people to adopt RE. Does this impact on the small non-RE consumer? I am not sure, because I am not convinced that BL&P’s payment for RE based on “avoidable cost of fuel” represents the real cost saving to them for consumers generating RE power. What about reductions in BL&P’s cost of running the current generating plant, savings in the construction and running costs of future generating plant, overheads and finance costs? I am arguing for short to medium term incentivisation for RE which should be monitored and reviewed against demand/adoption. This would allow any undue allocation of cost against the small consumer to be addressed when the numbers of RE producers increased – if it needs to be addressed.

    How will government make up for the loss in VAT – I could answer this by saying that as Government has a plan for 29% renewable power it would have already addressed the reduction in VAT in it’s future revenue plans. I suspect this is not the case and that no-one in Government has given the slightest thought as to how this will develop. One charging option put forward by BL&P (for the technical amongst us – Billing Alternative 2 in the consultation paper) means that the consumer pays BL&P for all power consumed, whether this is generated by the consumer or BL&P. This would retain VAT at current levels. I support the other alternative 1 which would mean VAT is charged only on power which consumers buy from BL&P, not on power that consumers generate and use themselves. If this means a reduction in VAT, so be it. VAT should not be paid on self-generated power; that would be like paying VAT on the vegetables you grow in your garden.

  6. @ Rubes
    In many countries Governments pay a “Feed in Tariff” which is a payment for power generated generated by consumers. Our Government has not chosen to adopt that route. Instead they seem to be allowing BL&P to play around with their “avoided cost of fuel” while on a positive note, allowing tax relief on the cost of RE installations and exemption for those installations from VAT.
    In the end, it comes down to whether BL&P and the Government’s charges/incentives result in enough of us installing RE systems.

  7. @ St George’s Dragon | December 12, 2012 at 11:30 PM |
    “If BL&P’s revenue decreases, so be it. Government has a renewable energy strategy which may affect BL&P’s revenue and they therefore have to roll with the punches.”

    Strong fighting words indeed! But you can’t be so ‘offhanded’(LOL!!) and must remember that you are dealing with a strategic business entity mostly owned and controlled by a transnational corporation whose sole purpose is to recover its recent investment and achieve a profit acceptable to its overseas shareholders. Any major changes in business circumstances that could reduce the investment’s cash flows and jeopardize outflows by way of dividends and management fees will certainly have serious repercussions on shareholders’ long-term interests in such a nonperforming overseas asset.
    This is the cost a small economically vulnerable country pays for giving almost total control of its strategic assets of such crucial importance to a nation’s economic development.

    The question is: How do we ensure to Emera a guaranteed return to recoup its investment and satisfy its shareholders dividend income expectations to avoid any run down of the plant or disposal to some unknown speculator possibly out of Russia?

    We must ensure that the local electricity generation remains financially and operationally viable and sustainable not only to provide the remaining energy needs that RE can’t meet but also to ensure that there is a reliable working back-up facility in case (as will happen) there are “unusual” extended periods of poorly penetrating sunlight to satisfy the RE requirements.

    The next question is: which class of consumer will be expected to finance this guarantee to Emera? As you pointed out, it certainly can’t be the ‘RE producing’ consumers? You can’t incentivize the RE investor and producer on the one hand (planting your own food analogy) and then penalize him by demanding a cost premium to meet Emera’s profit expectations and imposing a VAT charge to keep government revenues at socially demanding levels.
    The VAT loss could be recoup byway of transferring the imposition on other classes of fuels like gasoline or imported discretionary consumables.
    But how do we finance that guarantee to Emera? Who will pay the local increases in cost of electricity generated directly by BL&P? The forex equivalent to meet dividends and management fees remittances could come out of the savings accruing from reduced fuel oil imports but we can expect higher energy cost per unit of Kwh from the BL&P if RE sources are rapidly expanded.
    Will the government design a policy that would subsidize the BL&P operations by way of a special cess or tax on general consumption to ensure that those classes of consumers who can’t qualify for RE producing status are not unfairly penalized and forced to carry the Emera dividend burdens brought about by the country’s shortsighted decision to sell the BL&P to foreign interests like the dog grabbing at the bone that turned out to be just a shadow. For the proverbial 30 pieces of silver we have sold our financial and economic soul to the devil of profit and greed.

    Let’s continue this very important debate.

  8. @Miller

    You are correct that it is an important conversation we need to have instead of the BLP’s vacuous ‘we will subsidise energy if elected’ …lol.

    It explains why BU left it as the lead blog for another day.

  9. @ David | December 13, 2012 at 10:08 AM |

    You are entitled to take potshots (and to some extent justifiably so) at the BLP’s proposal to subsidize electricity by way of reducing fuel oil costs to the BL&P via the pass through FCA mechanism.
    But you also should decry this administration’s lack of correlation and synchronization between high sounding RE policy announcements and implementation and leading by example. Why is it taking so long to get the amendments to the BL&P Electricity Generation Act before the House? This is not any piece of controversial legislation like FoI but a vital legislative framework to save this country from further economic dislocation and forex losses. Even if it means a late Tuesday sitting just to go through the formalities which the Opposition would be foolish to oppose.

    What about the government leading by example by installing RE systems in buildings under its control and switching to hybrid models for its MP & ML fleet of vehicles?

    When are we going to see some action regarding the extraction of gases from the landfills to boost our existing natural gas reserves for commercial land domestic consumption?

    Is the government still on board regarding the pipeline from Trinidad and does it make economic sense to pump only LNG or can other fuels be included in this pipe line deal?

    This administration also has to stop advertising untruths and propaganda regarding the unprofitability of supplying fuel oil to the BL&P.
    It’s a blatantly misleading lie to state that the TOTAL fuel oil sold to the BL&P is purchased at Platts Prices and sold thereon with insufficient markup to cover costs incurred in this product sale. It is absolutely misleading to say that the locally drilled and produced component of the fuel oil sold to BL& P and bought back from the refinery in Trinidad is purchased at ruling Platts prices.
    I would like any one to come on this blog and refute what the miller has just posited.
    Where are you “To the point” & co including Amazing.
    In the land of the blind the one-eye man is king.

    • @miller

      It is a serious subject which has deep implication for sustaining our standard of living. It merits a robust non partisan debate if such is possible.

  10. st George delusional lizard [dragon]and by the way retarded funk /dragons dont exist therefore you are the one who needs the medication.fairy tales.
    see some one soon before your delusions get worst.and dont forget
    s——–m————r —–ya hereeeeeeeeeeeeee

  11. @ Harry callihan:

    Very good video on wave energy. A few of those off our East Coast would do just fine. UWI need to investigate and pursue. Let them get in contact with the university doing this cutting edge technology work. There is already some local research which was done many years ago in the early Eighties during the tenure of JMGM Adams.

    BTW, Harry, why are you damned hard ears? Stop this cussing lark and leave that to the miller and his cuss buddies like BAF.
    You were given an assignment of going around Barbados and highlighting the filth and garbage about the place to name and shame these authorities who are paid to do their jobs.
    Get in your SUV and do some “camcording” and ‘uploading’, Harry. Tout de suite, callihan, and make my day!

  12. I believe the recent take over of Domelec by the BL&P is a strategic move to counter any revenue loss in Barbados. I think they have planned for the eventuality of mass RE systems on Barbados roofs and landscape and are looking at other avenues to ensure that the returns from they Caribbean investments are at the levels they desire. A similar strategy was used by C & W Plc in this region for years and they out robust returns.

  13. Douglas Skeete before he lost a bit of his steam and challenged for a St. James (North?) seat made it clear that based on the offering to share holders and the rates that were guaranteed by the FTC people, that Emera would be paid back in full in under five years … FIVE YEARS, in case yah deaf …! I therefore see no challenge to ROI from a fall off in revenue that may result from a 29% swap out by existing consumers …!

    • Of peripheral interest:

      Grand Bahama experienced another island-wide power outage Wednesday afternoon.

      It was the second in less than two weeks, according to the Grand Bahama Power Company’s website.

      GBPC officials were unaware of the exact cause of the power supply failure and assured the public their crews were working diligently to rectify the situation and restore power to the island.

      The first power outage occurred Thursday, July 12, at 6:55 p.m. as a result of transmission and distribution failure due to the power company’s generation units malfunctioning.


  14. Don’t believe the hype , once you go solar you dont go back to BLP . BLP can’t stop change they can choose to come aboard or get lost . Why should we allow Oil Companies to exploit us ?

  15. you all may be glad or sorry to hear that Harry Callahan has passed.
    he died of sorrow for what has become of the love of his life barbados.
    he suffered long and painfully.watched as barbados became a place no longer recognizable as his birth place and his Irish ancestors since 1627
    may the lord have mercy on his tormented soul.
    he will not be on here again.

  16. St George’s Dragon | December 12, 2012 at 11:30 PM |
    @ Harry callihan (sic)
    The men in white coats should be arriving at your house shortly and with the drugs available these days and the innovative treatment now available it is possible that you will make a full recovery.
    You mean the men from the Animal Control Unit? In this particular very rabid case, the drugs that they will inject ,would be best administered via a 9 millimetre or a Magnum .357.

  17. Curacao exempts electric vehicles from import duty
    17 January 2012

    WILLEMSTAD — As from today, electro vehicles are duty-free, Minister-President Gerrit Schotte announced this morning during the seminar on eco-vehicles at the Hyatt Hotel. These vehicles that are driven by an electro motor are environment-friendly.

    The import duties for hybrid cars will be less than for environment-polluting vehicles. As from January 12th, Customs will charge 10 percent import duties for these cars. Hybrid cars are driven by a combination of various techniques, both by an electro motor and a combustion engine. The advantages are considerable, for instance a hybrid is less environment-polluting, the energy use is relatively low and now there’s the lower import duty.

    from Overseas Territories Review .

    WE NEED POLITICIANS WITH BALLS / TESTICLES TO LEAD THIS COUNTRY. Other countries are making strides in the renewable energy sector while we remain asleep . The BLP and DLP are just different sides of the same coin , they allow certain members of the private sector to fill their pocket and hold back progress .

    I am encouraging all to lobby the government of Barbados to change the custom laws and make electric vehicles duty free and hybrid 10% . Electric vehicles and hybrids can be charged using solar power.

    • @Malcom

      It is not rocket science what the government needs to do if it is serious. However the government is mindful of a group who claims to employ hundreds of people who will howl about having to send home people if the government embarked on such a policy. It is the same reason successive governments have lacked the will to go after food prices in the distributive and retail sectors.

    • @Baf

      You maybe correct when one realizes the unexplained concessions to the sector a couple budgets ago in an environment where the government is pushing RE.

  18. It was interesting to see Winton Gibbs- gm of BNOCL flatly refute the lies and inaccuracies in Pat Hoyos’ article in the Nation BLP Newspaper last Sunday. Once more proof that Pat Hoyos like Sanka Price seems to be more interested in pushing a partisan BLP agenda than in bringing reasoned and balanced analysis.
    Why can’t the Nation so called columnists bring a balanced, impartial analysis to their articles instead of singing from the BLP choir every week?
    Just a reminder that when you read the Nation’s columnists, know that you are not always getting the truth.

  19. @ NationBLPnewspaper | December 13, 2012 at 11:12 PM |

    So why do you continue to “read” lies and BLP propaganda?

    What does that say about your integrity and intellectual capacity?

    Why not stick to the Advocate for ‘truthful’ news and advertising?
    BTW, can you direct us to the page in the Advocate of today that mentions anything about the dismissal of the rape case against Mr. Crawford? I have not read the Advocate but would do if you could tell me where to look.

  20. I shall say it again.The transition to a partially RE based energy sector has to be gradual, and the subsidisation of oil is socially, politically and economically (though not environmentally) sensible in the short term given the existing economic climate and as well as the time it takes for the required shift in a society’s way of thinking with regards to the environment of which renewable energy is a part. Market-based incentives alone will not bring about the necessary change. What is required is a totally new attitude towards our environment and it is from such a starting point that RE and all the other facets of green living would be best embraced by Barbadians. The government appears to be clueless about what a ‘Green Economy’ entails–RE is only part of the puzzle. Is there an Environmental Economist in the ministries of Finance or Environment? Anyone trained in environmental communication and/ or public engagement/consultation?
    Take a look at Freiburg and see what I mean about a new way of thinking.

Leave a comment, join the discussion.