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Fuel surcharge subsidy to be removed in coming months – VINLEC CEO

Fuel surcharge subsidy to be removed in coming months – VINLEC CEO


Electricity consumers here will soon say goodbye to the fuel surcharge subsidy.{{more}}

At a press conference on Tuesday, CEO of St Vincent Electricity Services (VINLEC) Thornley Myers said that possibly by the end of June this year, all of the company’s damaged hydro stations should be up and running to full capacity, which would mean the end of the financial assistance.

“What we have been doing is that we have been comparing the hydro production of 2014 with 2013 and essentially saying the shortfall is as a result of not having full access to our hydro facilities.

“So, when that production reaches a level that more or less replaces that of 2013, we imagine that within a month or two.

“We are monitoring the situation closely and as soon as it gets there, we will make an announcement in this regard,” Myers stated.

The subsidy on the fuel surcharge was introduced at the end of January this year, after the December 24, 2013 storm that destroyed VINLEC’s turbines at Cumberland and South Rivers.

The loss of the plants prompted the use of more fuel to generate electricity, and. as a consequence, led to an increase in the fuel surcharge.

VINLEC’s board of directors made the decision to subsidize the fuel surcharge to customers while the plants were being repaired.

Myers said that ending of the subsidy would coincide with the period when this year’s hydro production more or less reaches the same levels as they were last year.

“It was not until the 24th of January we were able to get back into operation our first hydro plant…. Since then, our staff has been working assiduously to get our hydro plants back in operation.

“We had South Rivers back in February and in the month of March, we had two additional engines at Cumberland back in opertation.

“We are expecting that towards the end of May we would have the two additional engines at Cumberland; so, by the end of May, Cumberland should be fully operational once more, and therefore would represent for us a significant burden off all of us as customers.”

According to Myers, VINLEC subsidized the fuel surcharge to the tune of $1.3 million in January, $400,000 in February, and $150,000 in March.

He said that the subsidy was lower in the more recent months as the fuel surcharge increased, because those months were the driest months in St Vincent, and this was made worse by the fact that the hydro facilities were not in operation.

“This year April may be a little worse I think…I don’t think we have had two days of rain this month… if we’ve had rain at all, the water doesn’t get into the hydro production. You need a couple days of rain before you really start getting any production from hydro.

“This is costing all of us and don’t for one moment think that a subsidy is a gift from heaven; it’s costing customers, because at the end of the day all revenues from VINLEC comes from what it receives from its customers and we hope that the rain starts falling and that it begins to impact the fuel surcharge in a positive manner.”(JJ)