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Belco lawyer argues rates should have increased more

Belco has taken the Regulatory Authority to court over its rate-setting process (File photograph)

A regulatory body’s decision to not fully increase Belco’s electricity rates must be re-evaluated, a lawyer argued in the Supreme Court yesterday.

Francis Tregear, KC, counsel for the utility, highlighted to Puisne Judge Larry Mussenden that the Regulatory Authority rejected Belco’s recommendation for a 16 per cent rise of its base rate for 2022-23 and only approved a 7.5 per cent increase.

By doing this, Mr Tregear believed the authority overlooked the portion of the Electricity Act that orders a retail tariff large enough to cover a licensee’s cost of service be imposed.

He explained: “[This decision] watered down Section 35 [of the Electricity Act], which is all about methodology, and watered down the methodology itself.

“In determining the retail tariff, the RA got so much wrong that it must be recalculated.”

Adam Richards, representing the RA, told the court that Belco was using regulatory benchmarks for North America, which he considered imprudent.

He said: “There is no reason for Belco to have imposed North American regulatory models, and there is no consistency as to why North American law should take precedence over [laws from] any other jurisdiction.

“It would be prudent if the rate change was found to be reasonable and incurred, and there is not enough information from Belco to make that determination.”

During an earlier hearing in May, Thomas Amram, who led a team that advised the RA on its 2022-23 electricity retail tariff review, admitted the authority never released the report, which he said had “valuable insight into the make-up of decision”, to Belco and only presented the utility with a rejection letter in March last year.

He said he could not speak to the RA’s decision not to release it and agreed that doing so would have been “more transparent”.

Mr Justice Mussenden will deliver a ruling on the case at a later date.

The Electricity Act 2016 can be found in “Related Media”.