Questions and concerns are being raised about the fuel-related hike in electricity costs which Barbados Light & Power Company (BLPC) says is causing its residential customers to pay at least $22 more this month.
The scrutiny from Barbados Consumer Empowerment Network (BCEN) and others came as Minister of Finance Ryan Straughn indicated that Government was continuing measures intended to give Barbadians an ease on their electricity bills.
Last week BLPC announced that the Fuel Clause Adjustment (FCA) paid by customers had increased by 19.8 per cent for October because of “continued volatility in international fuel markets and higher fuel-related electricity generation costs”.
This related especially to the cost of aviation jet fuel which, unlike heavy fuel oil, was not benefiting from the fuel hedging arrangement being undertaken by the Barbados National Energy Company Limited (BNECL) and had “experienced significantly larger price increases than heavy fuel oil” during the past six months.
Reacting yesterday to news of the higher electricity bills, BCEN executive chairman Maureen Holder urged BLPC to provide more clarity on the $22 increase, saying that consumers deserved full information about the FCA and related matters.
This included “a clear breakdown of the announced increase of approximately $22 in the average residential electricity bill for October 2026, following a reported 19.8 per cent rise in the FCA.
“BCEN acknowledges that international fuel prices affect electricity costs. However, consumers deserve to know how much of the increase reflects fuel price changes and whether other charges contribute to the adjustment,” Holder said.
“This question matters because, on October 29, 2024, the Fair Trading Commission (FTC) approved the recovery of rental and operating costs for 11 megawatts of temporary Aggreko generating capacity through the FCA.
“BCEN is not claiming that these costs explain the current increase. We are asking whether they remain in the adjustment, under what approval and at what cost to consumers.”
Holder stated: “BCEN calls on Barbados Light & Power to disclose the contributions of heavy fuel oil, aviation fuel, purchased electricity and any temporary generation costs. “The company should also explain how fuel-hedging arrangements have protected consumers and identify any previous balances being recovered. Consumers also need clarity about the FCA smoothing mechanism.
“Deferring charges may limit an immediate increase without reducing the total amount payable. BLPC should disclose how much has been deferred, when recovery is expected and the potential effect on future bills,” she added.
Straughn, who said he saw news of the FCA-related electricity bill increase in the NATION while he was attending the International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, pointed out that the Budgetary Proposals announced in March to give Barbadians an electricity cost ease were continuing.
This fuel hedging tool allows Government, through the BNECL, to lock in the price of heavy fuel oil used by BLPC to generate electricity, and absorb 50 per cent of the increase in the FCA on electricity bills above the March 2026 bill at a cost of $7.9 million.
These measures were initially for three months, but the minister said they were still in place, as was value added tax on electricity bills being kept at 7.5 per cent for the first 250 kilowatt hours for residential homes from April 1, until March 31
next year.
Since the measures were announced in the Budget, the FTC approved BLPC applications related to the company’s use of additional temporary generation units, as well as for the pre-approval of it utilising equipment called synchronous condensers, decisions which Straughn alluded to yesterday.
“The BNECL, I think we are in the fourth fuel hedge now, and so we continue to protect Barbadians as much as we can,” he said.
“Now I do know that there were some issues related to producing the electricity which they [BLPC] had gone to the Fair Trading Commission for and was granted, which is outside of what we had programmed when I announced in the Budget. So the Budget measures continue, and obviously the matter relating to [the FTC] is outside of the arrangement we had put in place in March.”
Straughn also noted that during the course of the period there was a shift based on maintenance of some of the turbines.
“So they [BLPC] had to start using some of the other fuel, which obviously, as you would appreciate, is going up [in price]. But that really ought to have been a temporary thing, and that’s all the more reason why, whilst we are doing what we are doing on the heavy fuel oil, we are pushing to get the battery solution in place by the end of next year, so that the volatility associated with prices then will no longer be
as significant as it clearly is at the moment,” he said.
Ricky Went, an intervenor in regulatory matters before the FTC, was also concerned about rising electricity costs, including in the context of interim rates being paid to BLPC and its expected new rate application early next year, as indicated recently by the FTC.
“In essence, the cost of living is high and hurting everyone. The less fortunate is over-burdened. Yes, it is accepted that cost has risen and some areas are outside of our control, but collective effort is needed to ensure everyone can get the basic needs,” he stated.
His view was that in order to find a balance, one consideration could be that entities like BLPC “should be prepared to accept
lower rates of return”.
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