BELCO has pushed up rates for all customers by an average of 1.5 percent rate and has approval for further increases of 1.5 percent in 2006 and 2007.

A press statement from BELCO said it had been nine years since the company increased its basic rate but the increases were necessary in light of investment and rising worldwide fuel prices. The rise came into effect on January 1.

The statement said BELCO had financed operations and capital expansion from higher sales and cost containment efforts and had staved off increases until now.

The statement went on: ?However, given the continued pressure of rising costs, and the increased levels of capital asset expenditures necessary to meet the growing demand on our system, we no longer find ourselves in a position to sustain this period of rate containment.?

The application, approved by the Price Control Commission, is for an increase in the Facilities Charge for all customer categories and an adjustment to the Energy Charge in order to achieve an average 1.5 percent increase in overall rates.

Based on energy usage, the new rate results in increases of between one percent to two percent to individual customers.

BELCO?s rate increase is approximately 59.5 percent lower than the present annual rate of inflation (1.5 percent compared to 3.7 percent), according to the statement.

For the average residential customer using 730 kilowatts, the increase is equal to approximately $3.65 per month. This includes a $2 increase in the monthly Facilities Charge, from $10 to $12, and a decrease in the kilowatt hour (kWh) rate for the first 100 kWh of usage.

This increase largely offsets the effect of the increase in the Facilities Charge for lower-usage customers.

There is also a small increase in the kWh rate for usage above 100 kWh.

?We are sensitive to the impact an increase has on low-usage customers, who also tend to have less ability to pay,? said the statement.

?We, therefore, requested and received approval, for the rates for kWh usage to be adjusted to have minimal impact on these customers.

?The Facilities Charge is a fixed fee that recovers some of our fixed customer-related costs, such as basic distribution facilities, metering, service drops, billing and meter reading.

?These fixed costs for residential customers amount to approximately $37 per month and, while it would be ideal to recover all of these costs in the Facilities Charge rather than the Energy Tariff, on a percentage basis this would impact the lower-usage customer much more than the higher-usage customer.?

Those on financial assistance are exempt from the facilities charge and get a monthly refund to the Department of Financial Assistance.

BELCO said it had spent, on average, $23.5 million annually since 1996 on capital enhancements and refurbishment.

?This continued upgrading of assets and the addition of new, more efficient electricity generating plant has resulted in significant increases in our fuel efficiency levels which have helped to improve the number of kWh generated per barrel of fuel, thereby, containing the quantity of fuel used and, subsequently, the cost.

?Unfortunately, however, this has not been enough to overshadow the significant rise in the posted prices of a barrel of fuel in the world markets during the last year.

?This is a major dilemma which BELCO and the country face. Costs per barrel of fuel have reached record highs and, this in turn, has resulted in the highest ever fuel adjustment rates, which now account for 20 percent of a customer?s bill.?