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Belize Energy Sector Diagnostic PUC 33 2004. Current pricing suggests that this has been achieved. See Annex 8 for current BEL pricing. Subsidies and Programs In their 1998-2003 Manifesto, the government of the day made an election promise to “extend electricity to remote areas.”102 To that end, in June 1999, GOB embarked on an initiative with BEL to provide electricity to remote villages and towns throughout the country. Touted as the rural electrification project, the effort was underwritten by a $30m (Belize Dollar) loan from EXIM bank. From 2001 to the present, BEL recorded roughly two hundred and ten (210) government related projects funded by the loan. Additionally, in an attempt to provide electricity to the most needy, BEL created a “social tariff” as a part of their formal pricing structure. Prior to April 2003, the social tariff was established at $0.21 between 0-50kWh. Profits from mid and higher end electricity consumers were used to subsidise costs associated with the social tariff.103 After April 2003, the GOB negotiated with BEL to extend the social tariff upper limit to 125kWh and agreed that if the company’s revenue streams were compromised by the policy, the GOB would subsidise the shortfall.104 The effect of this decision and any subsequent subsidy will be determined in the annual tariff review scheduled for the first quarter of 2004. As of June 2003, the number of customers within the social tariff category was 22,000. Barriers to Entry BEL’s dominant position and partially subsidized operations would disadvantage unsubsidised new entrants wishing to compete in bundled services or in transmission and distribution markets. Large capital outlays and little opportunity to exploit economies of scale would be a factor. Brand loyalty may also be a factor.105 Generation The generation market is open to any viable competitor. Generators usually negotiate and sign long term power purchase agreements with the incumbent provider. Activity in this sector is regulated by the PUC, to whom any entity generating more than 75kW must apply for a license to operate. As a policy, the PUC is encouraging BEL to outsource generation to other independent providers and to this end is actively assisting and establishing the enabling context to encourage more environmentally friendly generation projects. In 2002, BEL was able to satisfy its aggregate peak demand of 54 MW from multiple sources. These are the importation of energy from CFE, a Mexican, state- owned power company, the Mollejon Hydroelectric Plant and its own diesel-fired generation. These are described further below: 102 People’s United Party Manifesto 1998-2003, Strike 3 Set Belize Free, pg. 14 103 Personal Communication, Gilbert Canton, PUC, November 3, 2003 104 ibid 105 Although price differentiation (lower prices) could easily challenge that.PDF Image | Energy for Sustainable Development Toward a National Energy Strategy for Belize Energy Sector Diagnostic
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