Opposition MP wants total examination of basic charge for electricity

An opposition legislator is calling for a comprehensive examination of this country’s performance in relation to the cost of energy.{{more}}

Parliamentary Representative for Central Kingstown St Claire Leacock told SEARCHLIGHT last week that he was concerned about the energy surcharge on customers’ electricity bills for August.

The St Vincent Electricity Services Ltd (VINLEC) said in a release that as a result of the reduction in the average cost of diesel fuel used in the generation of electricity during July, customers can expect to see a reduction of 4.69 cents per kilowatt-hour in the fuel surcharge rate on their bills for August.

However, Leacock said he believes that the release is misleading, as the fuel surcharge of 58 cents in July, was “at an all-time high”.

He said that when the fuel surcharge goes back to 54 cents this month, “it is still higher than what it was in June”, when it was 52 cents.

“There is really no amelioration there at all,” Leacock said.

The opposition parliamentarian said that when the governing Unity Labour Party came to office in 2001, the fuel surcharge was 16 cents per unit.

“Sixteen cents 10 years ago. From 16 cents per unit to 58 cents. That is 42 cents increase per unit!” Leacock said.

He explained that for a person who uses 300 to 400 units per month, this change results in an increase of more than $100 per month for electricity.

However, chief executive officer of VINLEC Thornley Myers told SEARCHLIGHT yesterday that last month’s fuel surcharge of 58 cents was not the highest it has ever been.

“There were times when it was higher,” he said, pointing to the period from June to September 2008 when the fuel surcharge ranged between 61.53 and 66.88 cents per unit.

Leacock, however, said that to address the cost of energy, the nation should be looking at the basic charge, and not so much at the fuel surcharge.

“The question has to do with whether we can’t get a reduction in the basic cost, not the surcharge, because they have no control over the surcharge; they have to vacillate with what happens with fuel.”

He questioned whether consumers are getting operational efficiencies from the company, which can be passed on to the consumers and which would see a reduction in the basic charge.

“We need to take a comprehensive look at what we are doing with energy … because a lot of people are crying out that they simply cannot meet that energy bill when it comes at the end of the month,” Leacock, a former VINLEC executive said.

He said many small businesses in his constituency are suffering because of their high energy bills.

“I think we need some kind of symposia across the political divide in St Vincent and the Grenadines and we really need to knock heads together to see … how we are going to get ourselves out of this quagmire. It is a problem,” Leacock said.

Myers, in response, told SEARCHLIGHT that for five consecutive years since 2007, VINLEC has been selling the same quantity of electricity; thus its revenue has not increased, but its operational costs have.

“I would like to know which enterprise has not seen an increase in operational costs over the last five years,” he said.

He said even in those circumstances, the government has reduced the electricity rates to the commercial and industrial sector.

“Efficiency improvements are not only seen in a reduction in rates, but an ability to hold rates constant,” Myers said.

He added that whatever cash the company generates from profits is used to provide for future expansion and growth of the company.

He also stated that the government, the major shareholder in the company, has, in recent years, received dividends from VINLEC, which goes to the Consolidated Fund for national development.