St. Maarten utilities GEBE will implement new tariff structure in August

POSTED: 06/17/11 2:15 PM

Managing director Brooks explains the fuel clause

St. Maarten – Utilities company GEBE will put its new tariff structure in place by August 1, managing director ir. William brooks said yesterday morning at a press conference at the company’s main office. The government gave GEBE approval for it ahead of a definite decision by year’s end on the condition that it only passes on the real cost of fuel in the fuel clause.

GEBE initiated the press conference because many consumers have been complaining lately about the lopsided proportion between the cost of electricity and the added fuel clause.

Commercial manager Steve Duzanson explained that in 2009, the company paid $330 for a ton of fuel. This year, that price has more than doubled to $760. Keeping pace with these fuel prices, the fuel clause on electricity bills jumped from 23 cents in 2009 to 56 cents this year.

“The infrastructure we work with dates back to 1960. My predecessors knew this; it is nothing new,” Brooks said. “It consists of a base price and a fuel clause, but in that clause we have a margin to cover operational expenses that are not covered by the base rate.”

In the new tariff structure this margin will disappear. The base rate will obviously be higher, but the added fuel clause will reflect the real price GEBE pays for its fuel.

“The base rate should cover the operational costs of our organization,” Brooks said. “In the new system we pass on the fuel cost one on one. If we pay $10 for fuel, the consumer will pay $10 as well.

To give an impression of the fluctuation in fuel costs the company has to cover, Brook said that GEBE paid 50 million guilders in 2006, 70 million in 2007, 100 million in 2008 (when prices spiked) and 75 million in 2009.

Brooks said that GEBE’s new concession is not clear about options for citizens to generate their own electricity, for instance by installing solar power. “There is no clause yet in the concession about solar energy,” he said. “I do not think that it is excluded, but it still has to be regulated.”

Some already locally installed solar systems have the GEBE-meter running backwards during moments when they produce more than their establishment requires. “I am not pointing any fingers,” Brooks commented, “but letting your meter run backwards is at this moment against the law.”

The managing director said that GEBE currently subsidizes electricity supply in the BES-islands that are now public entities of the Netherlands to the tune of 5 million guilders a year. “We are looking at a solution whereby the operational losses in Saba and Statia are paid by the Netherlands.”
GEBE’s water distribution network came under fire recently because the water losses on the system are around 35 percent. “We are currently performing leak detection tests to locate and fix leaks,” Brooks said.

In 2007 water losses amounted to around 25 percent, but in the past couple of years the percentage has shot up.

“That did not happen because brooks started working for GEBE,” Brooks joked. I did not go around punching holes in those lines. The truth is that the pipes the company used in the past were not the best choice. They are deteriorating and they start bursting at the seams. Now we use seamless pipes and we do not have that problem anymore, but it will obviously take time to bring the whole network up to par. If we repair a leak today, tomorrow another one could erupt hundred meters further down, and it is not possible to open up the whole island and replace the complete network in one go.”

Brooks said that Aruba claims water losses on its network of just 3 percent. “That is very low. We think we’ll be able to bring it down to between 10 and 15 percent.”

On another note, GEBE established a task force two weeks ago that is busy checking all electricity meters to get a grip on electricity theft. “We know there is theft, and when we discover this, we deal with it immediately.”

In the future GEBE wants to start using equipment for remote meter monitoring through its fiber optic network. “That will enable us to read meters from a central location, to connect and disconnect, and also to see when someone is tampering with the meter, brooks said, adding that options for the installation of prepaid meters are under consideration..


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