The ten per cent increase in the rebate for Trinidad and Tobago Electricity Commission’s (T&TEC) customers is expected to cost the Government about $41 million annually. The rebate was announced in last week’s national budget. On Wednesday, Public Utilities Minister Marvin Gonzales gave the Sunday Guardian this estimate.
Gonzales, under whose purview T&TEC falls, welcomed the increase which he said would further help the most vulnerable in society and low-income households. General Manager of T&TEC Kelvin Ramsook described it as a “good measure.”
Delivering the 2021/2022 $52.4 billion Budget, Finance Minister Colm Imbert provided several relief measures for the poor and low-income households, one of which was the announcement of a ten per cent increase–from 25 to 35 per cent– rebate on T&TEC bills that are $300 or lower.
This measure will take effect from January 1, 2022, and will apply to residential customers who are billed once every two months.
In the 2017 budget, Imbert announced the implementation of a 25 per cent rebate to customers whose electricity bill was $300 and lower.
When the rebate was 25 per cent the Government paid around $30 million yearly to cover its expense, Gonzales said.
T&TEC has 505,972 residential customers on its database. Of this figure, Gonzales said 210,000 customers benefit from the current rebate.
Questioned when T&TEC increases its electricity rates if this would trigger a hike in the low-income households’ bills, disqualifying them from the new rebate, Gonzales said measures will be put in place to deal with this issue.
“When the tariff increases the vulnerable customers who need additional help from the rebate… they can apply to get a utility cash card.”
To obtain these cards, Gonzales said customers must meet certain qualifying requirements.
Among those who will qualify for the cards would be recipients of social grants, low-income earners, unemployed, and people who live below the poverty line.
Rate hike to help offset $2 billion NGC bill
Gonzales said his ministry has already taken steps to increase both T&TEC and the Water and Sewerage Authority’s rates.
“We have made tremendous progress. T&TEC has finished with its business plan. I am expecting to have it in the next week or two which will be approved by the Cabinet. Once Cabinet approves it, then it goes to the Regulated Industries Commission so they can move forward with the process.”
Gonzales said by mid-2022 his ministry should receive a recommendation from the RIC on an appropriate rate structure for T&TEC.
“And then it is up to the Government to decide how the rates will be applied. That is the whole objective of the cash card, to ensure that in the likely event of an increase in electricity rates, the Government through the cash card system will continue to provide support to low-income and vulnerable groups in society in addition to the rebate system.”
Gonzales said an increase in T&TEC’s rates would help the utility company settle a $2 billion bill being owed to the National Gas Company for natural gas as well as assist with the commission’s operational expenses.
“That is the reason why we need the rate review. With a rate review, we are expecting that T&TEC would be able to collect some more revenues to be able to pay for the gas they are purchasing from NGC.”
He said it was time T&TEC and WASA stand on their own rather than depend on subsidies from the Government “so they can utilise their own funds to continue to improve the services to citizens.”
Gonzales disclosed that T&TEC is currently owed $900 million by delinquent customers and public sector clients.
“We have to recover these outstanding debts. A significant portion of T&TEC’s debt is as a result of public sector customers. A significant part of the debt owed as a result of the public sector…government agencies.”
Gonzales said a rate review would help remove T&TEC remove itself from “the financially precarious and volatile situation” it had found itself in.
T&T has the cheapest electricity and water rates in the western hemisphere.
T&TEC’s last rate increase was in 2009.
Ramsook: Rebate will have a positive effect
Ramsook believes that the increase in the rebate for customers in the lower bracket is a good initiative as it causes the population to conserve electricity usage.
“I think it is a good measure to assist people in the lower-income bracket where once they conserve they benefit. So if they keep the bills within that value certainly they will benefit in terms of getting a return and a lower bill overall. This measure is now even better as it’s now 35 per cent.
“If people don’t use kilowatt hours, then they don’t use the natural gas, and that gas can be monetised at a higher value that benefits the country more. Remember, we receive gas at a lower price so if you free up that gas so that the country could sell it at a higher value, certainly the country benefits more.
“The more you get that conservation, it frees up whatever infrastructure including the gas so that that it could be sold at a much higher value,” Ramsook told the Sunday Guardian.
He said the Government refunds the rebates to T&TEC and they are almost up-to-date with all the rebates that they applied in the past.
Ramsook said there was always room for improvement in T&TEC’s service.
“On the whole, we have competent employees and we have been delivering and we make every effort to improve every effort of our business operations. There are two issues that we could do a lot better in: There is street lighting repairs and we have done 21,976 for 2021 so far. We have been getting a lot of complaints about our call centres so more effort is being placed to provide a better service and response there.”