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BEC CLARIFIES THE IMPACT OF THE COMPUTED FUEL CHARGE APPLIED TO JULY CONSUMPTION

THE BAHAMAS ELECTRICITY CORPORATION PRESS RELEASE

August 25th, 2010

 

The Bahamas Electricity Corporation wishes to clarify for the benefit of its many valued customers, the impact of the computed fuel charge applied to the July electricity bills.

Contrary to the article in the Nassau Guardian entitled "BEC overcharges Customers 17 percent", the impact of the billing, attributable to the inclusion of a 7% stamp tax charge in the fuel charge computation, is of the order of 4%. BEC was not billed stamp tax and ought not to have charged stamp tax on its July fuel imports.



Your electricity charges comprise two components - a base rate and a fuel charge. The base rate, following the introduction of the new tariff, is somewhat less than the fuel charge. A 7% stamp tax and 10% customs duty was applied to the BEC fuel charge calculation. The application of a 10% customs duty resulted in an impact of approximately 5% on the overall bill which resulted in an increased customer overall bill of approximately 9%.

BEC was granted a tax holiday and was not billed Customs Duty and Stamp tax on fuel import, for a two year period. This exemption expired on June 30th, 2010. As of July1, 2010 Government introduced a 10% levy on BEC fuel imports. This was applied to customer’s bills.

As you our valued customers were not given advance notice of the introduction of the 10% levy BEC intends to make an adjustment to Customer's August bills that will have the impact of reducing July bills by about 9% i.e. the total overall impact of the Customs Duty and stamp tax that was charged.

As the 10% customs duty constitutes a portion of our fuel costs under the new Tariff, the Corporation is entitled to recover this costs.  As this is a cost that BEC cannot afford to absorb,  application has been made to Government to postpone the implementation of the 10% duty until appropriate communication has taken place with you our valued customers.


We do apologize and ask that you continue to lend us your support as we transition through this period. Customers are strongly urged to conserve energy costs during these times by reducing unnecessary usage.


BEC Management


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