Monday, April 22, 2024

Light and Power bid to recover cost

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Householders could see their monthly electricity bills increase by $41 over a three-year period starting next year, if Barbados Light & Power Company Limited (BL&P) gets regulatory approval to recover costs from planned major battery storage installation and associated investments.

This is detailed in an October 5, 2023 BL&P Application For Pre-Approval Of Investments And Cost Recovery Through The Clean Energy Transition Rider submitted to the Fair Trading Commission (FTC) and the accompanying October 4, 2023 sworn affidavit of BL&P manager of regulatory affairs Adrian Carter.

If approved, the higher electricity costs for consumers would be separate from the substantive rate increase application on which the FTC issued its decision and order on February 15, 2023. The Commission is currently considering a BL&P application to review and vary aspects of this ruling, having held a public hearing on the matter in August.

The Clean Energy Transition Rider (CETR) is the mechanism through which BL&P is seeking regulatory approval to recover from customers a combined total revenue of $131.26 million between 2024, 2025 and 2026 for its first Clean Energy Transition Plan (CETP) Project (CETP Project 1).

FTC chief executive officer Dr Marsha Atherley-Ikechi told the media on October 27 that “the basic tenets of the [CETP] were agreed upon and approved a few months ago. What the utility has applied for is the coverage of storage under that programme”.

Carter said in his affidavit accompanying the application: “A CETR rate of $0.1386 per kilowatt hour is estimated to recover the revenue requirement associated with the CETP Project 1. The rate impact related to the total investment for a typical residential customer using 250 kilowatt-hours per is estimated as an increase of approximately $41 or 21 per cent on their monthly bill compared to current rates.”

The total revenue requirement BL&P is seeking via the CETR in its application to the FTC for $684.89 million in investments is comprised of 90 megawatts (MW) of battery energy storage systems ($115.15 million), independent power producers’ interconnection ($8.54 million), synchronous condensers ($6.85 million), automatic generation control ($540 679), and the distributed energy resources aggregation and control platform ($167 429). BL&P managing director Roger Blackman told the media during an October 25 briefing that the batteries and related equipment would “work together to smooth out the supply from renewable energy sources that are connected to the grid”.

He said this was as the grid “quickly” approached the 100 MW limit at which assessments by his company and independent consultants concluded “would require battery storage to ensure continued reliability of the grid once distributed renewable energy grew beyond 100 megawatts”.

In its CETR investment and cost recovery application, BL&P submitted that “the approval of the investments under the CETP project 1 will ultimately reduce regulatory lag and likely limit the frequency of general [electricity], rate reviews”.

In a November 8, 2023 notice by General Legal Counsel and Commission Secretary Kevin Webster, the FTC said “the hearing of the application shall be by way of written hearing, pursuant to Procedural Directions to be issued by the Commission at a later date”.

“During this hearing, only those persons who have submitted a letter of intervention and have been granted approval in accordance with the criteria as set down in the URPR will be entitled to participate,” the notice stated.

The FTC is giving prospective intervenors in the proceedings until 4 p.m. tomorrow Friday, November 17, 2023 to notify it of such. It added in the notice that “considering the nature of the Application and the urgent need to provide mitigation to the public grid, no extensions of time will be granted.

Attorney Tricia Watson, who along with chartered accountant David Simpson is intervening in the substantive BL&P electricity rate application, has taken issue with the no extension-of-time decision and the fact that the matter will be conducted through a written hearing.

She also stressed that if the CETR cost recovery-related application was approved “consumers are expected to bear this burden along with the burden of the increases that [BL&P] is still demanding in the still to be decided 2021 rate increase application”.

On the no time extension decision, she said: “What is wrong with it is that the documentation filed for this new application is over 730 pages. That is not considering all of the other information that you will have to read to make sense of this application, like the thousands of pages related to the still ongoing 2021 rate increase application, and like the 127 pages of the FTC’s 2023 interim decision.”

“The Fair Trading Commission, staffed with a team of trained personnel and consultants, gave itself a whole month to review this new application.”

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