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Belco denies rates ad error

Belco has denied making an error in advertising proposed rate changes, but admitted making a mistake in a tariff filing for the rate change and in a subsequent press release.

And a company spokeswoman said the error actually made the proposed price changes look worse than they were.

The issue arose after Belco applied to the Energy Commission to increase electricity costs for residential and small commercial customers year-on-year until 2014 to cover the cost of the company’s new north plant and stagnant energy sales.

In its findings, the Commission noted that an error had appeared in the tariff and stated that the mistake appeared in advertisements about the proposed rate change.

“A series of Belco advertisements in the local media explaining what a 700 kWh example home is paying now and would be paying in 2012 also contained the calculation error.”

It continued to say Belco failed to place new advertisements in the media to correct the error, as advised by the Commission.

Responding to the report, a Belco spokeswoman said: “Belco wishes to clarify that the error the Commission is referring to was not in the rate advertisement, but rather on page 31 of the tariff filing itself.

“The error was brought to Belco’s attention less than one day before the end of the objection period on November 30. Given media advertising deadlines, it would have taken a minimum of three to four days to re-advertise, at which point the objection period would have passed.

“As the initial advertisement did not provide the comparison contained on page 31 of the filing, there was nothing in the advertisement that required correction.”

Questioned on the issue earlier this week, the spokeswoman acknowledged that the error had appeared in a Belco press release on November 14, 2011, sent to the Island’s media outlets, including

The Royal Gazette.

A section of the release said the average monthly usage by residential customers is 700 kWh and, under the proposed increase, a customer using 700 kWh per month would see their electricity bill rise from $280.13 in 2011 to $283.05 in 2012, a difference of $2.92.

Belco has since said that if the proposed rate changed had been approved, the rate for a 700 kWh would have actually fallen by more than $10.

Asked about the November press release, a spokeswoman said Belco was unaware the error had been included.

“[The Energy Commission] didn’t refer to the press release. We never even looked at the press releases because we were told to look at the advertisements.

“If we had known about the error, we would have recalled it. It would have been in our best interest.”

After deliberation, the Energy Commission slashed the proposed rate increase arguing that it would result in those who use the least electricity seeing the largest bill increases.

Belco is now in the process of appealing that decision.

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Published March 24, 2012 at 8:52 am (Updated March 24, 2012 at 8:51 am)

Belco denies rates ad error

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