BEL reports massive loss to shareholders

Belize Electricity Limited (BEL) last night held its annual general meeting at the Belize Biltmore Plaza. Unfortunately, the company had a rather poor year in 2012. It reported a  loss of $16 million. The reason? Sharply increased cost of power offset by a return of $30 million to consumers for not reflecting the true cost of power in the rates at that time. Rates were reduced by three cents in February 2012 only to go right back up a year later due to cost of power increases. Betty Tam is the Senior Manager for Finance and Human Resources.

Betty Tam – Senior Manager BEL:
vlcsnap-2013-06-21-18h33m20s120Yes indeed, we made a record high 193 million in revenues last year.  However if you take a look at our statement of comprehensive income, the cost of power was actually 164 million dollars. So in reality after we net that off we had more or less 29 million to work with, with respect of operating expenses, which takes into consideration insuring the maintenance of our systems and giving reliable power as we move forward in 2012. Those were the challenges.

vlcsnap-2012-12-31-18h54m11s28BEL actually recorded some $193 million in gross revenue, the most in its history. But cost of power jumped from $129 to $164 million between 2011 and 2012. Still, the company was able to give a dividend of 5 cents per share as a result of increasing shareholder equity by 37 million dollars. Demand for electricity increased by 8 percent with over 1,600 new customers, but a particularly low rainfall total hampered progress with the hydroelectric dams. According to Tam, the company is working with regulator the Public Utilities Comission (PUC) to find new sources of energy.

Betty Tam – Senior Manager BEL:
I guess everyone knows that of course the rates to customers went up. However as a company we do not just sit and let that go by.   We are in BELCOGENdiscussions with our power suppliers to see how we can get reduced rates, and to work out better and more reasonable cost of power, so that we can pass it on to our consumers.  We have already discussed with CFE and this should come on-line by the end of July, [and] they have agreed that they will reduce the cost of power top us by 10%. So that is a good thing going on for us.  We have started negotiations with BELCOGEN, and we will continue to do so with the other power suppliers.

Until those new sources come through, BEL prays for rain, rain and more rain.

Betty Tam – Senior Manager BEL:
HydroThe rainfalls have just started.  We hope that it continues so that the Hydro will be able to give us more power. But in the meantime, in the short term, we do have to rely on CFE.   Besides negotiating with our power suppliers, we are also working along with the PUC to set out a RFP (Request For Proposal) to source more reasonable energy, so that we can pass that on to our consumers as well.
We are looking for renewable energy also, because of the environment.   

Government holds 7 in ten shares in the company since it was taken over in 2011 from Fortis of Canada.

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