Utility regulators have approved a Barbados Light & Power Company Limited (BLPC) application to recover the cost of investment in some new equipment, but Barbadians will have to wait to find out the financial impact on their electricity bills.
In a decision dated August 14, 2026, the Fair Trading Commission (FTC) approved BLPC’s investment and cost recovery for three new 20 megavolt-amperes (MVar), purpose-built synchronous condensers (SCO), not the four that the company applied for.
The FTC also ruled that costs associated with the investment in three SCO “shall be ultimately recovered through base rates pursuant to the next review of electricity rates”.
Rate hearing
It added that “if there is no rate hearing by the time the three SCOs [have] been procured/ commissioned, then the related SCO costs should be recovered through the clean energy transition rider (CETR) [and] at such time, further analysis of the CETR rate would be appropriate”.
The regulator added that BLPC “can invest in a fourth SCO of its own volition. However, it shall be required to demonstrate the use and usefulness of this investment at a future rate case hearing”.
BLPC said in a statement last evening that there “is no immediate billing impact to customers”.
“BLPC is still evaluating proposals received to determine the selected vendor and final cost. In accordance with the decision for cost recovery through either the next general rate review application or the CETR, once the units have been commissioned, BLPC will seek the necessary cost recovery approval from the FTC,” the company explained.
In its written decision, the FTC flagged what it called BLPC’s “reluctance to disclose exact cost information prior to a comprehensive analysis of the content of RFP responses”.
90 per cent higher
In its December 2025 application, BLPC said four SCOs would cost $78.7 million but in its final submission on the matter on June 23, the company said updated pricing information meant that “equipment and civil works costs were approximately 90 per cent higher than the original estimate”.
The FTC said that without exact cost information, it had to use an “extrapolation of the available data to replicate the 90 per cent increase from original values submitted in the application”.
On this point, Ricky Went, an intervenor to the application, questioned “how on earth can a utility refuse to provide the information that a regulator requires to assess its application and still was not expressly penalised?”.
The FTC said the original estimate for three SCOs would have seen a customer bill impact per average 250 kilowatt hour usage of an additional $1.61 a month, while originally it was an additional $2.15 a month for four SCOs.
With the 90 per cent increase, the FTC calculated customer impact of $3.02 a month for three SCOs and $4.03 a month for four SCOs for the average residential customer.
This was after it noted that if capital expenditure (CAPEX) were inflated by 90 per cent, “this increases CAPEX by $70.8 million to $149.6 million”.
Important step
In welcoming the FTC decision, BLPC said yesterday: “The approval represents an important step in preparing Barbados’ electricity system to accommodate significantly higher levels of renewable energy penetration while maintaining the stability, reliability and safety of the electricity grid that customers depend on every day.
“As conventional generating units are progressively retired and renewable energy penetration increases, the grid will require alternative sources of certain critical systemsupport services traditionally provided by those units.
“SCOs are intended to provide that support and are therefore an important enabling investment for Barbados’ renewable energy transition.”
While not getting regulatory approval for four SCOs, BLPC said that at this stage it does not intend to seek a review of the commission’s decision.
“The approval of three synchronous condensers still enables BLPC to advance critical infrastructure that will support the safe, stable and reliable operation of the electricity system and help facilitate Barbados’ clean energy transition,” it stated.
Noting that the FTC had provided a pathway for cost recovery through either the next general rate review application or the CETR, depending on project timing and implementation schedule, the company added that it was “currently assessing the relevant timelines before confirming its preferred approach to the commission”.
Went said in response to the decision that his main concern was that customers should not have to shoulder unreasonably increased costs incurred by BLPC.
He objected to customers having to pay for a 90 per cent increase in SCO-related capital expenditure amounting to an additional $99.4 million and urged that the company be required to provide more realistic growth rates and recompute CETR rates for customer classes based on a 2026 to 2028 forecast.
Another intervenor, Stephen Worme, believed the FTC made the right decision, as he noted that even with the 90 per cent increase in CAPEX costs, “ the impact on customers’ electricity bills should not be significant”.
“Since it was proven that there is no better choice from a combined financial and technical perspective, it was important that the FTC put the necessary steps in place to ensure that the purchase and installation of these are managed in such a way as to minimise the impact on customers’ bills. I was, therefore, happy to see that they had done so in their decision,” Worme added. (SC)
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