fp Turks and Caicos

Commissioner of Electricity Malike Cummings recently spoke to the Consultative Forum about a number of energy issues, including electric rates.

Electric utilities must provide annual profit reports to the governor to prove an acceptable  balance between their costs, rates and profitability, Cummings said.

While base utility rates haven’t changed in many years, the “fuel factor” has gone up and down with the price of diesel fuel. Fuel factors were introduced worldwide after the oil crisis of the 1970s to allow utilities to adjust for changes in the price of fuel. When the cost of fuel goes up, so do electricity rates.

The fuel factor is reviewed monthly to make sure that any adjustments that utilities make in rates correspond to changes in their cost of fuel, Cummings said.

But factors other than world oil prices make it expensive to generate electricity in the Turks and Caicos, Cummings said.

Diesel engines used to produce electricity here burn low-sulfur No. 2 diesel fuel, which is more expensive but less polluting than cheaper fuel used in many other countries.

Getting that fuel to the utilities is more expensive here because there are no deep water harbors, especially on Provo. So fuel has to be transshipped in smaller vessels from the Bahamas, where it incurs additional handling and duty charges.

Because of relatively small customer bases, utilities here have used smaller generators, which have higher operating and maintenance costs, Cummings said.

On Provo, PPC Ltd. is installing the first of two larger generators that will produce three times the electricity of its largest engine while using significantly less diesel fuel.

The Ministry of Environment and District Administration and Department of Environment and Coastal Resources are seeking proposals to develop a path toward greater energy efficiency in the next 5-10 years.

More than 90 percent of the country’s electrical power is generated with diesel, and the cost to generate is among the highest in the Caribbean — 28 cents per kilowatt hour compared to 10-15 cents for the rest of the region, according to the terms of reference for the project.