The United National Congress Government is sticking to its promise not to increase electricity rates, thus far.
This was reiterated by Minister of Public Utilities Barry Padarath, who told Guardian Media yesterday that the Government would hold true to its promise it made on the campaign trail not to raise electricity rates at this time.
“In the lead-up to the general election, Mrs Bissessar-Persad, Prime Minister, had addressed these issues as it relates to public utilities. We took the position then that at this time, there would be no move by the incoming administration to increase any rates, whether it be water or electricity. We hold true to that position that we promised the electorate,” Padarath said.
However, he said the Government intends to review the operations of public utilities companies, particularly the Water and Sewerage Authority and the Trinidad and Tobago Electricity Commission, to improve the quality of supply and the management before anything else is further done.
“So that is the position that we have taken. I know that the recommendations from the Regulated Industries Commission (RIC) were sent to the then-cabinet. October of this year will make it two years since that proposal was sent. I don’t have the details just as yet in terms of what those recommendations would have been. What I can tell you is that we intend on keeping our promise to the electorate and the people of Trinidad and Tobago with respect to not increasing water and electricity at this time,” the minister added.
The RIC, which regulates the delivery of services by T&TEC and WASA, had recommended an increase in electricity rates and service charges for T&TEC customers and had proposed that all rates—for residential, commercial and industrial users of electricity—increase by varying amounts.
It had also recommended that customers be billed on a monthly cycle instead of the existing bi-monthly cycle, adding that customers would be billed under a four-tier rate system instead of the previous three tiers.
Residential customers were expected to see an increase from 15 to 64 per cent; commercial customers will increase from 37 to 51 per cent, and industrial customers were expected to see an increase from 58 to 72 per cent.
Guardian Media also reached out to economist Dr
Vaalmikki Arjoon on whether the Government ought to revisit raising electricity rates.
He said that while some fiscal consolidation is necessary, it should not come at the cost of sharply increasing the cost of living and doing business, as the RIC’s 2023 rate proposals would.
Noting that the last RIC review was in 2006, with a single adjustment in 2009, Arjoon suggested a more balanced approach would have been gradual, incremental increases over the past 14 years – far less disruptive to households and the private sector, compared to these recent rate proposals.
“While our rates are indeed lower than the rest of the region, the key difference is that we are a gas-based economy and it would be more appropriate to compare ourselves to other gas-based economies, especially since our electricity is gas-based.
“Our residential rates per kWh are approximately US$0.052 which is higher than Nigeria (US$0.032), Angola (US$0.016), Algeria (US$0.04). While other countries like the US, Canada and Denmark charge more at US$0.16, US$0.123 and US$0.366 per kWh respectively, they also offer higher minimum wage than our economy with more advanced health care and social services, schooling, infrastructure, access to potable water, housing etc, suggesting better value for money and quality of life,” Arjoon explained.
He said the rates proposed would hurt the competitiveness of the private sector and discourage additional investment.
Further, Arjoon said food prices would also increase as supermarkets would have to pay higher electricity charges which would be passed on to consumers.