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EMERA Wants Increase!

It harrows the blogmaster with fear and wonder (thanks Artax) that the Barbados Light and Power company (EMERA) sees it fit and proper to apply for a rate increase. The company in its PR communication to deflect the decision assures low income households the increase to billing will be negligible IF approved by the Fair Trading Commission (FTC). The assumption is that the middleclass and others will have the capacity to absorb what is estimated to be upwards to a 20% increase in monthly billing.

The question from a lowly blogmaster is why does Barbados find itself in a position where EMERA feels justified to request a rate increase. Under the previous Democratic Labour Party government there was a push to aggressively implement a vibrant renewable sector with the objective of weaning our dependence on Barbados Light & Power as the controlling power source. Several years later the question we are justified to ask is – are we there yet?

The country is currently consumed with Covid 19 narratives but walking and chewing gum still apply. An affordable energy cost is critical to managing the cost of living in Barbados.

Source: CBC

91 responses to “EMERA Wants Increase!”

  1. Artax Avatar
    Artax

    “It harrows the blogmaster with fear and wonder (thanks Artax)…….”

    @ David

    No sir. The phrase is found in act 1, scene 1 of Shakespeare’s ‘Hamlet.

    So, it’s him you have to thank.

    Hahahahahaha

  2. David Avatar
    David

    Artax you are too modest, you introduced it to BU. Blogmaster has license!

  3. John A Avatar
    John A

    Wunna want an increase no surprise. Now you see if we had done as many here said at the start of covid 2 years ago and started a massive alternative energy push wunna know where you would stand today!

    What ever the FTC give wunna I want the same percentage of the grid opened up for private alternative energy producers. So if the FTC give you 10% well tell them we want 10% of the total production of emera given to local solar producers large and small, for resale to the grid. I got some room up here for more panels so believe me I will be first in line! Bizzy clear off the rest of that pasture up there we planting post!

  4. bajanfreeparty Avatar
    bajanfreeparty

    We hope these People have “Clear Title Deeds” , We shall be coming for our money also if it found out that they cant prove clear title , We also need to build another power supply company in Barbados to bypass these overseas crooks looking to Milk Bajans like a C.O.W : BFP

  5. John A Avatar
    John A

    Also the question must be asked if it is the tax payers job to ensure Emera a hefty ROI who will protect the tax payers?

    Let’s look at it in practical terms. Every time the public expand solar and resells to the grid, the revenue base of emera shrinks. So if they are to maintain that ROI on lower sales then they come to the same public for a rate increase. It is a broken formula the FTC are using. So as their sales shrink are we going to have to continue to prop up your ROI? At what point then will government set in and say no enough?

    Then again them can’t even make a decision on the vaxx thing so clipping emera wings will hardly happen.

  6. William Skinner Avatar
    William Skinner

    @ Et al
    We had twenty five years to look toward renewable energy but we were more interested in empty phrases about “punching above our weight” and “excellent economic management” and the gem of all gems: the possibility of fine tuning how “quickly we can borrow millions” and exporting that “skill ” to other countries.
    innovation takes revenue and at this time, we are bragging about millions or billions in forex sitting some where, while the noose tightens every hour around the necks of the masses both lower and upper. No sense having a fridge full of goodies and the door is locked; your children can’t even get a piece of cheese or a glass of ice water.
    The ball is over, Mary’s wooden legs were accidentally left by the fireside………..crocodile tears.

  7. John A Avatar
    John A

    @ William

    Yes we are late to the party for sure. However if government removes the roadblocks on alternative energy production and stops limiting its size, the private producers will expand.

  8. Vincent Codrington Avatar
    Vincent Codrington

    We preferedr to guaranty an acceptable ROI to foreign private speculators than to a company owned by the NIS and other local investors.That was some peculiar ” fine ants”.

  9. John A Avatar
    John A

    Let’s look at it in simple terms and remove all the fancy talk.

    So let’s say instead of electricity emera produced blotting paper and fountain pens. Should government then restrict the importation of disposable pens and other new writing instruments to keep Emera In business selling blotting paper and fountain pens? My point is technology has surpassed the Emera formula and for them to get the return now on their investment using an outdated approach, does not fair well for us the consumers.

  10. David Avatar
    David

    @John A

    Interesting that EMERA is looking to recoup investment in the St. Lucy renewable installation? One would have thought that setup would have been positioned as a profit centre re: opportunity cost.

  11. John A Avatar
    John A

    @David

    An increase based on St Lucy must be rejected. It is their expense to refit their grid not ours. If you have outdated technology then it is for you to replace it. So wait what they saying then is we must finance that and then they turn around and depreciate the same blasted item off their bottom line. No sir!

  12. David Avatar
    David

    What they are saying is that government must guarantee a ROI.

  13. William Skinner Avatar
    William Skinner

    @ John A
    You and other continue to have faith in a private sector that has not delivered in times of national need. A progressive government , and we don’t have any from within any of the parties, would have earmarked this sector for small lean efficient businesses. There are Bajans local and overseas , who are versed in this industry. The governments want the same lazy players to developed this “new” industry and I don’t have that confidence in them. I hope , on this occasion, I am proven wrong.

  14. John A Avatar
    John A

    @David

    So wait who guarantees evey other business on this island an ROI?

    How the ass any company can be guaranteed an ROI today.

    Listen tell them move aside then and let local producers have free rein and sell to their grid no problem. Good thing I ain’t the FTC

  15. David Avatar
    David

    @William

    Can you tell the blog what barriers are in place to prevent Bajans in the diaspora from investing in the RE sector ?

  16. David Avatar
    David

    @John A

    If you go back to when Darcy Boyce was in charge he was very clear the government had to tread carefully so as to not to destabilize our power supply.

  17. William Skinner Avatar
    William Skinner

    @ David
    I never said there were barriers , I only stated that there were some Bajans who would be competent in the area. Furthermore, I specifically said both local and overseas Bajans. Not looking for nay argument. Peace.

  18. John A Avatar
    John A

    @David

    Yes I heard that sad story many times. So tell Darcy answer this.

    What is the difference with emera producing solar to the grid and John Smith producing solar to the grid? The technology is there to maintain a stable grid today regardless of input source. Problem is emera got millions of dollars in outdated technology we must provide an ROI on.

    This thing really vexxifies me!

  19. Pachamama Avatar
    Pachamama

    David
    You will always be caught in wonder and fear.

    Emera has always been a rent-seeker. What else would you have expected of the rentier class?

    Why should there have been an expectation that a publicly owned entity, traded on a major market and engaged in the most gangsterism there is in business, the energy business, would do anything less. They only care about share price appreciation.

    Thirty years ago we, under an asshole LES, we had a chance to forever change the fundamental nature of our economy with The Mutual Affair and the spake of privatisations which could have been turned into cooperative corporations. So even if higher rates were to be paid we would in effect be paying it to ourselves.

    We warned you to expect all kinds of extortionist, distortionist, corporate edicts not unlike the similar, about Covid for example, coming from a politicians near you. Which you jubilantly applauded.

    Cheerlead this because there are no differences between the two.

    Can you see any other way out but a Global Rebellion against elite forces. Or are you still minded that some fanciful election somewhere could resolve these myriad of intractable problems engulfing poor people.

    A rebellion not for marching and singing shiiite but like France 1789. This is were we are.

  20. David Avatar
    David

    @John A

    Do not disagree with you but you will need to persuade the FTC energy from RE should not be classified as intermittent.

  21. David Avatar
    David

    @Pacha

    Remind the blogmaster how EMERA landed ownership of this strategic asset?

    #thanks

  22. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU
    As usual this is a consequence of mixed signals sent to the public and to foreign investors. We need to have a serious conversation with and among ourselves as to what our economic system should aim for.The bottom line should be the Economic Well-being of all our citizens. The strategies ,if there are any, are not internally consistent.

  23. Pachamama Avatar
    Pachamama

    David
    You know these circumstances better than most. What are you getting at, precisely.

  24. John A Avatar
    John A

    @Vincent

    Yes I.must agree with you 100%. One minute we are saying one thing then we say another. There is no documented schedule for anything in this sector that investors can plan by.

  25. David Avatar
    David

    @Pacha

    See Vincents comment. As a country and people we have to prioritize what we want – to be relativistic is not a practical approach.

  26. Pachamama Avatar
    Pachamama

    David

    His comment at 0938 though more subtle does not appear inconsistent to ours.

    Still don’t understand your original question.

  27. David Avatar
    David

    @Pacha

    What is the decision making process that sees the gifting of our strategic and important national assets to non Barbadians? How should we measure the ROI in education in the circumstances? What is the plan to design a model that can sustain a way of life given available resources?

  28. Hants Avatar
    Hants

    57.89 CAD
    +11.36 (24.42%)past 5 years
    Oct. 8, 10:29 a.m. EDT

    https://www.marketwatch.com/investing/stock/ema?countrycode=ca

  29. Raw Bake Avatar
    Raw Bake

    Dis discussion to high fuh me, so I cud only ask a foolish question.
    What prevents de Government from subsidizing or even underwriting the cost of this RE thing to the average man with a little 4 x 4 board shingle castle in de Turnin?
    We gaw wait pon another Elsa or move to Rock Hall first?
    Wuh we ain’t people too?
    China cud only donate vaccines?

    Anyhow, we really ain’t care bout selling back to nuh grid nor nutton so, causing dah looking like too much red tape. We just want a little system to run de fridge, freezer, fan, few lights and maybe the washing machine. Dah should ease de pressure on de pocket and de postman, cause I duz be asking he every time I see he, “post, yuh ain’t got nutton fuh me?”
    He duz laugh and seh, not today dads, az I get it, I gine bring it, hang in dere” I duz smile in me heart to know dat at least, somebody still cares and I know he still looking out fuh me. Wuh I wuz sehhing now…

    Oh right, effing de powers dat be cud come up wid a system that enable communities to benefit from de RE that doan require permission from EMERA. A photovoltaic system on every property, one housetop at a time. Dat would be great and truly appreciated. Legacy worthy even.

    Now when I seh communities, I doan mean de gated ones, not dat I got anything against dem, I mean people dat doan have de wherewithal to invest $5 in a half bottle or a case of Corona.

  30. David Avatar
    David

    @Raw Bake

    Like most things there is the will political and other.

  31. Heather Avatar
    Heather

    @Enuff,

    In case you missed this on the other post:
    What has happened to the plan to let householders sell energy on the grid? There has been no mention of it for moths but almost every major plantation is equipped for the industry. It looks like the memo left out the households. Is this the latest heist while everyone is distracted by Covid-19?

  32. John A Avatar
    John A

    @ david.

    I heard on the news today that Emera is asking for the increase based on the fact that the ROI has fallen as a result of suppliers of AE.

    Which is the same dam thing i said earlier this morning would happen. So everytime they lose market share they will argue they need an increase in base rate to make it up.

    Imagine if you had 100 customers each buuing $10 a month from you. You then lose 50 of them, do you now expect to charge the 50 that are left $20 for the same item? If the FTC grant permission based on this they deserved to get chase way!

  33. Stalwart Avatar
    Stalwart

    The increase will be granted but not at the rate BL&P is asking. It will then be sold as a “win win” solution.

  34. Stalwart Avatar
    Stalwart

    This requested rate increase has nothing to do with any renewable energy plant but everything to do with the money MAM forced them to spend in 2019/2020 to upgrade their old, outdated equipment. They would have continued on their merry way putting handsome profits in the pockets of the Canadian masters were it not for the damage caused to the BWA’s equipment in 2019 and MAM’s strong reprimand.

  35. FearPlay Avatar
    FearPlay

    So, ask for more than you deserve, let the FTC stage a hard negotiation show and settle on what you want, then declare a victory for FTC and Emera. Loser is the consumer.

  36. John A Avatar
    John A

    The point that we must drive home to the FTC is that it is unfair to give Emera a guaranteed ROI when no other company in Barbados is that lucky at this time and ALL are suffering from falling rates of ROI. Also that is being passed on to the shareholders in the form of reduced annul dividends, so they too are feeling it.

    Secondly once we start this nonesence, then when ever Emera loses market share to AE, they will expect to have their profit pumped up to where it was by its customers. What incentive therefore does Emera have to be efficient or lean when their ROI is guaranteed anyway? Nonesence.

    Thirdly Emera will capitalise that project and deduct all the interest cost off their taxes as an allowed expense every year. They will claim an annual deprecition on the plant until such time that it has no book value. That depreciation expense will also be deductible from the pretax revenue of Emera every year.

    So based on all of the above now they want a rate hike as well as all the tax savings they will get from deducting the interest and depreciation cost of this project! What de ass I hearing at all.

  37. Pachamama Avatar
    Pachamama

    John A
    What kind of a set of JAs would give a corp a guaranteed ROI.

    Are you sure?

  38. John A Avatar
    John A

    @ Pacha

    That is what we were made to understand was a condition of the Emera purchase. I have heard no one deny it so I can only assume it is true. Dont know if Artax has heard different but I haven’t.

  39. FearPlay Avatar
    FearPlay

    Based on Emera’s model, Chefette should be able to charge more for their fare every time they open another branch. I mean to say, building a new outlet cost the company big numbers and it’s not for their convenience, it’s for the consumers convenience. And realize that they are taking away their own customers from other branches, so they should get a ROI that’s commensurate with their expectation, right? What a load of BS!

  40. Raw Bake Avatar
    Raw Bake

    I usually have difficulty remembering when to say “excuse me” and when to say “please for a pass”, but I seem to recall that the guarantee is because BL&P, being the sole purveyor, is obligated to maintain the highest standards possible so dat de rest uh we cud rest assured that we equipment in gine blow up az we plug um into the socket, or dat de power ain’t gine go off every time de rain fall, de lightning flash or a monkey decide to swing pon one of de lines. Plus I think dem duz collect a lil berry to maintain them 50hz motorcycle or something so, but don’t quote me cause like I said before, I duz caan remember certain things.

  41. Donna Avatar
    Donna

    Time for me to get moving on my solar panels. In the meantime energy efficient equipment and reduced usage works for me.

  42. FearPlay Avatar
    FearPlay

    Quick question: Are they going to apply for an increased rate at which they purchase energy from the grid also?

  43. David Avatar
    David

    POWER SHOCK
    Bajans warned hike could see up to 20% rise in prices

    By Colville Mounsey
    colvillemounsey@nationnews.com
    Barbadians are being warned to brace for a 15 to 20 per cent increase in the cost of goods and services if the Barbados Light & Power (BL& P) is successful in its application for a rate increase.
    On Monday, the utility company filed an application with the Fair Trading Commission (FTC) for a review of electricity rates which could range from five per cent to 20 per cent.
    In a virtual press conference yesterday, the management of BL& P said that the utility had been hard-hit by the onset of the COVID-19 pandemic and that fiscal space was needed for crucial infrastructural investments, such as renewable energy, which were in sync with Government’s goal of 100 per cent green energy by 2030.
    However, economist Jeremy Stephen put Barbadians on notice that this proposed increase could hit the pockets of consumers even harder, as he noted that the logistical challenges and heightened global shipping costs due to the global importation of Christmas stock were likely to deliver a huge blow to an already shell-shocked transportation system.
    “At the very least, if this application is successful, we can expect 15 to 20 per cent increase in the cost of services and goods
    in Barbados,” Stephen said.
    Brewing economic storm
    Making it clear that he fully understood the rationale for BL& P’s decision, Stephen said the timing was helping the atmospheric conditions for a brewing economic storm.
    “If such an increase were to come at a time when tourists were coming and spending at the levels they were in 2007, in an environment where we had a few commercial projects, nobody would be complaining because most people would have been able to afford it. If the economy continues the way it is, it will mean a further degradation of confidence, which would mean even more unemployment down the line,” said Stephen.
    He further explained: “So it is a two-pronged issue – it is not just the cost increase, but it is compounded by the fact that we have COVID and the fact that the tourists are not spending. On top of this 15 to 20 per cent increase across the board, I anticipate a further jump in inflation coming on in November to December because of logistical issues that we see worldwide as it relates to massive imports for Christmas.”
    Director of customer solutions at the BL& P, Kim Griffith-Tang How, said yesterday the company understood what the move meant for the cost of living but it was a case of not being able to hold strain any longer.
    She argued that the company had not received a rate hike in 11 years, noting that several attempts were made over time to stabilise the fuel charge to the customer.
    “We recognise that the fuel component of the bill accounts for more than 60 per cent depending on the price. This has been our focus for the last few years, because on three occasions our company attempted to put in place a fuel hedging programme.
    “There were a few times during the last few years that we saw the cost of fuel fall significantly and with a view to stabilising the prices to customers, we attempted to lock in the low fuel prices and have that stabilisation,” Griffith-Tang How said.
    Managing director of BL& P, Roger Blackman, said the decision to request the rate increase was by no means a sudden one, but one which had been held back by the company for the last two years, despite significant financial strain on the country’s lone electricity service provider.
    We have been working on this for some time – in fact, back in 2019, based on our financial situation at that point. After discussions with Government and with stakeholders, we took the decision to try to defer and instead assist customers as best as we can, notwithstanding the challenges that we are facing.
    “However, we have delayed for as long as we can as a team that is responsible for an essential service to the economy,” he said.
    BL& P, which has about 130 000 customers, pointed out in a statement released on Thursday that 35 per cent of them, who it “assumed to consist mostly of low-income customers” and used less than 150 kilowatt hours each month, would pay
    no more than a $6 increase.
    That is based on the rates that the company has proposed to the FTC. It added, however, that for other customers, “the typical bill increase resulting from the proposed rates is estimated to range from five per cent to 20 per cent depending on the tariff on which customers receive their service”.


    Source: Nation

  44. Pachamama Avatar
    Pachamama

    David

    Are you in a position to confirm what our friend John A stated relative to a guaranteed ROI.

    Better yet, are the full terms of this deal ever been made available anywhere?

  45. TheOGazerts Avatar
    TheOGazerts

    I saw that Hants was the only person who looked at the stock price.

    EMERA
    46.47 USD +10.95 (30.83%) past 5 years
    Not bad

  46. Tron Avatar
    Tron

    We are experiencing the perfect winter storm for Christmas:

    skyrocketing energy prices and as a consequence rising food prices for the masses, radical Muslims rioting with the Chief Labour Officer and and a UWI professor against businessmen who care about the health of their employees, rising Corona case numbers because our indigenous population in their superstition do not want to get vaccinated and scared tourists cancelling their hotels.

    The situation is very similar to the 1980s, when parts of our elite wanted to cure HIV with garlic. We are still feeling the fallout today, with HIV rates among native men 10 times higher than in North America and Western Europe.

    Our Supreme Leader must now crack down on the aforementioned minorities! We also need a scapegoat for the Corona disaster. How about the opposition opposeing compulsory vaccination?

  47. David Avatar
    David

    @Pacha

    Here is the order. The RoR is not guaranteed from the text contained in the link.

    https://www.ftc.gov.bb/library/blip_app/2010-01-22_commission_decision_No2_of_09_rate_review_barbados_light_and_power_company_limited.pdf

  48. Hants Avatar
    Hants

    @ TheOGazerts,

    https://www.emeracaribbean.com/about-us/our-structure

  49. Pachamama Avatar
    Pachamama

    David
    Thanks much. Will study once a computer is at hand.

    Thanks much.

  50. Chris Halsall Avatar
    Chris Halsall

    I don’t have time to get too deep into this. And I have no “insider” knowledge of any kind. Dropped in because David asked me something earlier.

    When modeling this situation, I think it is important to keep in mind that BL&P is now going to have to depreciate its legacy carbon-based generation plant faster than originally programmed. This is because of an “ask” from the GoB.

    The “ask” for a Rate of Return on Rate Base (importantly, this is the maximum allowed; it’s not guaranteed) will have to go through the FTC. And, properly, involve another hearing. Based on heuristics, they will probably get what they ask for (or very near) after the process.

    BTW… Hearings can be very long, expensive, and tiring. Great fun, though! 😎

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