GREAT BAY--Prime Minister Dr. Luc Mercelina has addressed concerns about reported overcharging through GEBE's fuel clause, explaining that any consideration of additional refunds or consumer relief must also take into account the millions of guilders owed to the utility company by customers who have not paid their electricity bills.
Mercelina acknowledged concerns about the fuel clause and outlined the government's efforts to establish a regulatory framework that would provide greater oversight of how electricity tariffs are calculated and charged to consumers.
The discussion centered on previous reports indicating that GEBE had collected more through its fuel clause than was necessary to cover fluctuations in fuel prices, resulting in additional revenue for the company. Mercelina did not dispute the need to examine these concerns but emphasized that the fuel clause must also account for the costs GEBE incurs in purchasing fuel from its supplier, SOL.
According to the Prime Minister, GEBE must incorporate the amounts it pays SOL into the tariffs charged to electricity consumers. His remarks placed the fuel clause within the broader context of GEBE's financial obligations, including the costs of obtaining fuel necessary for electricity generation.
However, the Prime Minister did not state that SOL determines GEBE's fuel clause or that responsibility for calculating the tariff rests with the supplier. His explanation concerned GEBE's obligation to recover its fuel costs through consumer billing.
The discussion also raised questions about whether consumers should receive greater financial relief if previous fuel clause calculations resulted in overcharges. When asked whether GEBE could increase its relief to consumers based on the reported NAf. 1.5 million in excess charges, Mercelina acknowledged that such an option could be considered, provided the reported figures were accurate.
"If that is the case, that is maybe possible. And what are they going to do with all the millions that consumers didn't pay to them in all those years?" the Prime Minister responded.
Mercelina argued that an assessment of the company's financial position cannot focus exclusively on additional revenue generated through the fuel clause without also considering unpaid electricity bills.
He explained that while reported margins may indicate that GEBE collected more than necessary from certain charges, the company's financial position is also affected by customers who have accumulated outstanding balances over several years.
"So you can look at what they made as a margin, but actually statistically it has impact in their bookkeeping if everybody pays their bill. But if there are a lot of consumers that still have an open standing bill, it's going to be difficult for GEBE to responsibly do something with more relief," Mercelina stated.
The Prime Minister's position was that the utility's ability to offer additional relief must be assessed against its overall financial circumstances, including revenue that remains uncollected because of outstanding consumer debts.
While acknowledging the concerns raised about potential overcharging, he expressed appreciation that GEBE had committed NAf. 1.5 million toward consumer relief despite its financial challenges. "And I acknowledge, and I'm grateful that GEBE under the circumstances still is offering 1.5 million to the people of Sint Maarten," he said.
Government Working on Electricity Tariff Regulation
Beyond the immediate discussion about overcharges and consumer relief, Mercelina explained that the government is working toward establishing a legal framework to regulate electricity tariffs and provide greater oversight of the amounts charged by GEBE.
He recalled that the government had previously engaged the Bureau of Telecommunications and Post (BTP), in cooperation with the Regulatory Authority of Curaçao (RAC), to examine the validity of the utility company's billing calculations.
The review was intended to determine whether the methods used to calculate consumer electricity bills, including the fuel clause, were appropriate. Mercelina said the initial analysis was only the first step and that legislation is required to establish a formal system of tariff regulation.
According to the Prime Minister, the proposed legislation is already in draft form but must complete the required approval procedures before it can take effect.
These include consideration by the Council of Ministers, review by the Council of Advice and subsequent parliamentary consideration.
The proposed framework would establish a more formal basis for government oversight of electricity tariffs, supported by technical assessments and recommendations from BTP.
Mercelina also confirmed that BTP is engaged in discussions with GEBE, SOL and other stakeholders to examine the different components of the fuel clause and electricity tariffs.
He said these discussions are intended to produce a clearer understanding of the appropriate formula for calculating consumer charges.
