Government to remove demand charge on Electricity bills

As of March 1 this year, the local business sector can expect to see a slight reduction in the cost of electricity with the removal of the demand charge on their electricity bills.{{more}}

Prime Minister and Minister of Finance Dr. Ralph Gonsalves, on Monday, January 24, in his 2011 Budget address, said that he proposes to eliminate the demand charge which, according to him, has “haunted commercial and industrial consumers for several decades.”

“The high cost of electricity, particularly the demand charge levied only on businesses in St Vincent and the Grenadines, has been identified as a major constraint to business expansion,” Gonsalves said, adding that based on data supplied, this country had one of the highest unit costs of electricity in the Caribbean.

However, while the charge of 9.6 cents per kilo watt hour is being removed, the prime minister announced that there was going to be an increase in the energy charge for commercial and industrial consumers.

The energy charge will now be $0.54 per unit, up from $0.48 for commercial consumers, and $0.45, up from $0.44, for industrial consumers.

Gonsalves further explained that this meant savings of 3.6 cents and 8.6 cents per kWh for commercial and industrial consumers, respectively.

The total cost of this measure, according to the prime minister, is estimated at $2.75 million and will be borne by the St. Vincent Electricity Services Ltd. (VINLEC).

Meanwhile, he noted that the power company will continue with efforts to implement measures aimed at reducing the cost of electricity, which include the installation of generators that use a heavier fuel which is much cheaper than diesel which is presently being used; the installation of a heat recovery plant at Lowmans Bay to produce electricity from waste heat, and the expansion and renewal of the supply from hydro stations.

In the presentation of the Estimates last Thursday, January 20, Gonsalves also noted that his administration intended to put more emphasis on energy conservation.

“We waste too much energy in the public service,” the prime minister said, adding that some machinery needed to be set up to address the question of energy audits.

Included in the 2011 Estimates are provisions for the Energy Unit, with funding provided by the European Union, to adopt energy saving technologies in several government buildings, including the Milton Cato Memorial Hospital, the Central Police Station, the St Vincent and the Grenadines Community College, and the Central Medical Stores, at a cost of $1.68 million.(DD)