WITHIN the next two months, electricity consumers, long concerned about their high bills because of a fluctuatingfuel clause, can expect some ease and greater certainty with a new formula from the Fair Trading Commission (FTC).
In a decision announced Friday followinga four-month review of the Fuel Clause Adjustment (FCA), the regulatory agency has determined that the basis for calculating the FCA must be switched to the use of historic costs instead of projected fuel costs and that the monopoly Barbados Light and Power Company (BL&P) can use the “smoothing” technique to avoid rate shock to consumers of significant fluctuations in the FCA from one month to the next.
In other words, if the calculated December FCA is much greater than the FCA in November, the BL&P may apply an FCA in December that is less than that calculated from the formula. This shortfall will then be recovered in the following month.
“In this formula,” said the five-member FTC, chaired by Sir Neville Nicholls, “the percentage of energy used by auxiliary equipment such as feed pumps and cooling fans in the generating stations and losses that occur through the transmission and distribution of electricity will be subtracted from the gross energy produced.