Page 13 - CARILEC Electricity Tariff - December 2014

Base Rate of

return used Rate Change Exchange
Name of Utility Regulatory Rate Setting Methodology
for rate Mechanism Rate Clause
Agency
setting (%)
Annual non-fuel
rate adjustments.

Annually, Profit after tax (as defined
by Act) is divided by Contributed Electricity Supply
Capital to establish RoR. If RoR is 12.6% Act Cap 9.02
LUCELEC N/A No
less than 10%, tariffs are increased as (2013) Revised Laws of
prescribed in the Electricity Supply Saint Lucia
Act.
MUL None - - - -
Tariffs set by Minister of Economic
NVGEBE None Government - No
Affairs with advice of NV GEBE
SKELEC - - - Government No
8% for The RIC sets the
Regulated
regulatory framework for the
T&TEC Industries Incentive Base, Fixed Revenue Cap
Commission(RIC) period 2006- tariff review
2011 process.
Virgin Islands The PSC is responsible for setting 1.75 Debt
VIWAPA Public Service service PSC No
rates for the Authority.
Commission coverage

NOTES – Rate Setting Methodology
BEL: cost of services segmented: (a) a fixed component; (b) a variable component; and (c) a deferred cost of power recovery
program. (a) a fixed component to cover overhead expenses and provide the company with reasonable rate of return for which fees
are chargeable to recover the cost and profit associated with each function, (b) a variable component that reflects the cost of power
(energy supply) and (c) a deferred cost of power recovery program.

BELCO: Rate application is based on cost of service. Submissions made as needed to a Government appointed Energy Commission
(i.e. PUC)

FORTIS: In Prescribing a tariff or rates under subsection (1), the Governor shall have regard to the need to ensure that a public
supplier derives a sufficient income- a) to cover operating expenses (including any taxes) and to make adequate provision for
maintenance, depreciation and the payment of interest on borrowings b) to meet periodic repayments on any indebtedness to the
extent that such repayments exceed the provision for depreciation c) obtain a reasonable margin of profit

JPSCo: The OUR has the responsibility to set and approve rates proposed by JPS. JPS is regulated under a price cap incentive
mechanism and must submit an .oltaje.ion for the recalculation of non-fuel base rates every five years. The OUR determined rates
provide for a return on rate base (i.e., regulatory assets) and recovery of non-fuel costs. Fuel costs are recovered subject to an
efficiency adjustment mechanism. Annual adjustments are allowed under a price cap Performance Based Rate-making Mechanism
as established in the license. Annual adjustments allow for inflation subject to productivity improvements (X-factor), reliability
improvements (Q-factor) and contingencies outside of JPS’ control (Z factor).

Notes – Base ROR used:
JPSCo:The OUR determines the fair return on capital utilised by the business. This ROE is determined after giving consideration to
ROE’s of comparable regulated utility companies, the risk free rate of return and the mature market and the country risk premiums.

Notes – Rate Change Mechanism:
JPSCo: Monthly adjustments to compensate for movements in the foreign exchange rate relative to a base exchange rate which is
reset annually. Fuel costs are adjusted monthly based on movements in fuel cost and are recovered subject to an efficiency
adjustment mechanism. Annual adjustments non-fuel rate adjustments are allowed under a price cap Performance Based Rate-
making Mechanism as established in the license. Annual adjustments allow for movements in inflation subject to productivity
improvements (X-factor), reliability improvements (Q-factor) and contingencies outside of JPS’ control (Z factor).

T&TEC: The RIC sets the framework for the tariff review process. In keeping with this framework, T&TEC submits to the RIC its
Business Plan for the new regulatory period with tariff proposals to achieve the objectives outlined in the Business Plan. The RIC
reviews the Plan, seeks additional information/clarifications as necessary, inclusive of holding consultations with stakeholders and
makes a Determination approving rates for the new regulatory period.
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