Philipsburg:---The St. Maarten Hospitality & Trade Association and the St. Maarten Timeshare Association met with Mr. William Brooks and Mr. Steve Duzanson of GEBE yesterday afternoon to discuss reliability of service, the tariff structure, and alternative energy.
Reliability of Service
The SHTA expressed its concern regarding the effect that the frequent power outages are having on businesses' ability to provide quality, reliable service to their consumers and the growing need for residents and businesses to invest in a backup system. The SHTA questioned what the operational setbacks are that are preventing GEBE for functioning optimally. Mr. Brooks explained the challenges that GEBE has been encountering and listed the company's plans to improve reliability of service:
- The construction of a new substation on Pond Island, which together with the station on A. Th. Illidge road would be able to better service the Dutch side of the island. This should be complete by the end of 2010
- A ring system is being worked on to ensure that when incidents occur in one area, power can be shut off to that particular district rather than to the entire island.
- Technicians are scheduled to overhaul the machines that have reached maximum running hours.
- Plans are being made for the purchase of a 3rd 11.3 MW engine
Unexpected new developments on the island on the short term can negatively impact the long-term capacity plans of utility companies. As a result of unexpected developments, the planning, purchasing and installment of equipment necessary to maintain a reliable supply of electricity to the community can fall behind the demand. Constant communication between Public Works and GEBE continues to be vital to forecasting demand and updating long-term plans for GEBE's electricity production capacity to stay ahead of the electricity demand.
Tariff structure
Mr. Brooks reported that the tariff structure was established in 1960 when the price of oil was approximately $4 per barrel (vs. $80 presently) and the local circumstances were different. He stated that the base rate no longer covers GEBE's operational expenses, and as a result the fuel clause incorporated much more than just the price of oil; hence the need for the new structure.
With regards to the fuel clause, Mr. Brooks explained that this was set up with a profit margin attached, meaning that when the price of oil increased, so would GEBE's profits. In the new structure, the fuel clause will be a pass through fee that will have no effect on GEBE's profits.
With regards to the proposed structure, he informed that the fuel clause cannot be removed.
More importantly, the tariff structure is not expected to increase or decrease fees but make it more predictable. This, he said, would allow residents and businesses to better predict and manage their electricity costs.
An increase in the base rate is also planned.
The structure is still to be reviewed by the Supervisory Board, after which it will be taken to the Executive Council for approval.
In terms of offering relief to businesses, Mr. Brooks stated that GEBE is not allowed to alter any of its rates without the approval of Government, but hopes that the new structure will assist businesses in their financial planning.
Alternative Energy
The SHTA asked if there are any plans to introduce alternative energy on the short term that would assist in stabilizing the supply and the cost of electricity. Mr. Brooks advised that the costs associated with Geothermal Energy, specifically the installation of the submarine cables, are high. Further current geothermal installations on Nevis and Saba are not yet operational. The costs of solar panels are also very expensive. Wind energy, on the other hand is the most affordable, but also the most unreliable.
GEBE has been directed by Government to purchase 6 Megawatts of electricity from the waste management project, for which the costs are not yet clear..
The meeting concluded with Mr. Brooks expressing compassion for what the businesses and residents have had to endure and stressed that GEBE is working diligently towards stabilizing the electricity supply.
Overall, the SHTA found the meeting to be very informative and plans to stay in close contact with GEBE to improve the quality of service and life on St. Maarten.
