Opposition Leader slams high electricity costs
Opposition Leader McKeeva Bush hit back at CUC in the Legislative Assembly as a dispute over electricity costs continued.
It was ‘shameful’ that CUC has issued a full page advertisement in three newspapers to refute statements he made in the Legislative Assembly outlining issues contributing to the high electricity bills here, said Mr. Bush in response to the ad.
Consumers, already facing high electricity and other costs, would be the ones paying for the ads, he claimed in a statement in the House on Monday.
No one could deny the cost of electricity was high and, as many felt, at a level that is ‘totally unacceptable,’ he said.
Mr. Bush said he would not be silenced by CUC, ‘who posted a net income of over $49 million between 2003 and 2004.’
He felt the agreement referred to as having been approved by the negotiating team during the UDP administration needed clarification.
‘The negotiations that Mr. Hew mentioned in the full page ad were based on the fact that CUC would be giving up their exclusive licence seven years prior to the expiration in 2011.
‘If a surcharge was then added to consumers’ bills it would have been based on the fact that the surcharges would have been justified under an agreement that didn’t include the 15 per cent guaranteed rate of return that they presently enjoy.
‘In terms of the agreement, that agreement also called for a price reduction and a price freeze as well as for the establishment of a hurricane fund which would have been funded by CUC to be activated in the event of natural disasters.
‘The other relevant fact is that this was a weighted formula, which took into account a lot of other factors including the cost of living index.
‘In the Heads of Agreement, it was agreed by the negotiating team that there has to be a methodology in place to allow CUC to recover expenses from a category three hurricane, or above, disaster.
‘CUC’s transmission and distribution network cannot be insured without prohibitant cost, so we were cognizant of this fact. The surcharge that CUC referred to in their ads would have only been applied for the additional cost items that were incurred to their T&D network, and not to generation.
‘Therefore the recovery fund, which had been agreed, would only be used to pay for expenditures related to the T&D network and not for generation.
‘The fund would have been built up over time so that the impact to the consumers would be lessened, if CUC experienced damage to their T&D network due to a natural disaster.’
He felt it was important the public were informed about the following other items in the agreement, ‘that Mr. Hew conveniently omitted.’
‘CUC was to reduce prices immediately in addition to the reduction that we had got them to do.
‘That CUC would operate in a competitive environment. Their licence would be on a non-exclusive basis.
‘There would have to be the creation of separate companies, one which operated the transmission and distribution and one which operated the generation capacity.
‘Competition would be introduced to allow for there to be at least two power generation companies. This would have allowed competition, if it had been proven that another company could provide cheaper electricity rates.
‘An insurance fund would be created to cover the cost to repair any damage to the T&D facility.
‘A price freeze would be implemented for a period of four years. The price of electricity could only be increased during this four-year period if the consumer price index increased by an extraordinary amount.’
It was ironic that the only part of the agreement which was implemented was the part which benefited CUC, Mr. Bush claimed.
He wanted to ask the president of CUC whether he thought it was fair to allow for such an increase in electricity bills, ‘while he was publicly announcing that CUC posted net profits of $6 million per quarter for the same year.’
Mr. Bush said he would continue to fight CUC and anyone that thought they could continue to charge ‘exorbitant prices.’
‘I cannot sit by idly and allow this to happen no matter how many full page ads are published by CUC,’ said Mr. Bush.
‘I suppose this will give CUC another opportunity to spend more of the people’s money on high paid lawyers, consultants, PR companies and full page ads.
‘All of which I am sure they use under the present agreement to justify recovering their cost and charging higher electrical bills to the poor people of this country,’ he said.