Lower Cost of Electricity?

By Richmond Felix

August 25, 1998 - In 1985 the St. Lucia Electricity Services Ltd. (LUCELEC), commissioned a study to determine the direction that the company should pursue, in meeting the forecasted growth in demand for electricity. The company has established a 20-year least cost Electricity Development Plan, which will serve as the framework for an island wide electrification program.

Phase two - the $77 million "B Station" at Cul-de-Sac, was complete last month and formally opened over the weekend. It will provide LUCELEC with increased generating capacity, at a more efficient rate than ever before.

The improvement efforts, which LUCELEC is pursuing are praise worthy, says Minister responsible for Public Utilities - Senator Calixte George, however there are some burning issues which government is concerned about. These relate to efficiency, reliability and cost - from the consumers stand point. LUCELEC has consistently imposed a fuel surcharge to its customers, based on 1973 fuel costs. "Since it represents adjustments due to fluctuations in fuel costs, then the present base price in 1973 level is unfair and need adjusting," the Minister told those gathered for the commissioning of the new station. The Minister added that due to the low base price of fuel set by LUCELEC, the large surcharge calculated by the company and past on to the consumer may provide the company with little incentive to improve efficiency and reduce on wasteful practices.

The formula, which LUCELEC uses in determining charges to its customers, is stipulated under the Electricity Act # 10 of 1994. Senator George believes that it is almost impossible to determine how these formulae and changing factors are used to bill customers since they are not clearly defined. There is therefore need for these factors to be explained to ensure that the electricity company maintains operating efficiency, above a minimum threshold. Senator George -"While Government will allow LUCELEC to enjoy a return on an investment, LUCELEC will have to meet certain targets such as fuel efficiency, electricity supply penetration, line loss reduction and improvement in the quality of service."

Government has established a Public Utilities Department to oversee the operations of public utilities and monitor their performance. The department is also required to act as a conciliator for complaints from the public and provide policy options to government. In essence it is to be the main link between the utilities companies and government.

With 97% coverage of the islands households and businesses, LUCELEC has the distinction of being in more homes than any other utility. Chairman of LUCELEC, Marius St. Rose says that his company has identified the importance of continually improving efficiency as the only means of survival. St. Rose says "We are assiduously working to attain a situation where when the public thinks LUCELEC … it automatically thinks or associated the company with the positive images of efficiency and of a company that has a caring concern for its consumers and the wider society."

The completion of the 2nd phase of the company’s Electrification Development Plan will allow for the retirement of the retirement of the power stations at Vieux Fort and Soufriere and subsequently the older plant at Union. The 3rd and final component of LUCELEC’s Electricity Development Plan is due to commence later this year. It is expected that on completion of phase three by the year 2000, the company will have the capability to meet all anticipated short to medium term demands, which some of the most modern and efficient plants in the region.

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