VINLEC’s CEO explains the fuel surcharge

Though fuel surcharge has been implemented in St Vincent and the Grenadines for the past 47 years, it remains one of the most misunderstood issues in relation to electricity generation and billing.

This is the view of Thornley Myers, the Chief Executive Officer of St Vincent Electricity Services (VINLEC), who took the opportunity in a recent interview with SEARCHLIGHT to explain the controversial topic.

He explained that money collected through the fuel surcharge is used to pay for fuel used to generate electricity.

In other words, money collected by VINLEC through fuel surcharge is paid directly to those who provide fuel used to generate electricity, and it is not a profit making venture. 

“VINLEC makes no money, so every cent that you give us as a result of the fuel surcharge, we essentially pass over. We’re almost like a fuel retail company…the fuel surcharge is the mechanism to recover the cost of what VINLEC uses to pay for the fuel. Because the cost of fuel to us fluctuates, then what you pay for, fluctuates,” Myers explained.

Of the nine power plants operated by VINLEC, only three are operated using renewable sources; the hydro plants in Cumberland, Richmond and South Rivers.

Currently, between 80 to 85 per cent of electricity in SVG is generated using diesel fuel.

And the cost of fuel has, and continues to fluctuate throughout the years, which in turn affects the fuel surcharge on consumers’ bills.

The CEO said the price of fuel has been one of the most pressing issues in the world, as it has changed significantly in this time.

One of the effects of these fluctuations is that people have come to see electricity as an expensive commodity.

“When I became the CEO of this company in 2004, the fuel surcharge was 12, 13 cents thereabout, and about four months in office, it got up to 17 cents…” Myers said.

He added that it had risen to 60 cents by 2008, with the sole reason being the rise in fuel prices.

“I don’t think our public has yet grasped how the changes in fuel prices affect the fuel surcharge. That’s one of the challenges we have all the time,” Myers told SEARCHLIGHT.

The CEO said since the fuel surcharge was introduced in the 70’s, many have misunderstood the concept, and some go as far as attempting to create a notion “that there is something sinister about the fuel surcharge”.

However, Myers said that money collected from the fuel surcharge cannot be used by VINLEC for any other purpose than to pay for fuel used to generate electricity.

“That would be illegal because there’s a law…in 1974 a law was established that set about how the fuel surcharge must be calculated. Any one of us in VINLEC who divert from that, essentially, they are breaching the law, and breaking the law has consequences, whether you are the CEO of VINLEC, or whether you are the man on the street, breaking the law has consequences,” he said.