Electricity Bills nearly doubled as Fuel Factor Rate drives up bills

By Dana Malcolm

Staff Writer

#TurksandCaicos, June 30, 2022 – An exponential rise in electricity costs is shocking Turks and Caicos residents who received their bills on Wednesday and because these bills are validated by the Energy and Utilities Commissioner before distribution, it means Government is aware of the increase which almost doubles power bills.

The warnings were issued earlier this year and now islanders are really feeling the blow.  Residents have shared their home energy bills with Magnetic Media with up to $ 200 and $ 300 jumps in cost and they are raising questions about these new bills and how they are tallied.

In several instances usage seems to be up nearly 200 kilowatt hours for a great deal of residents.  Just as concerning is the fact that the fuel factor is nearly as high as the actual electricity usage.  Several of the bills we saw showed the fuel factor charges nearly even with the actual usage, a double whammy if you will.

“The fuel factor rate (or power cost adjustment) is a mechanism used to recover the cost of fuel used to produce the electricity consumed by each customer.  It is calculated monthly, and is based on the fuel consumed for the specific period and determined by the actual price of fuel at the time it is purchased, from our supplier, Sun Oil Limited.” the Fortis TCI website explains.

Essentially this means your total bill is calculated by how much you have used and how much the fuel used to make your electricity costs.   A high fuel factor will put a heavy strain on pockets no matter how much residents conserve.

In March this year the government announced the Food and Fuel Tax break would be going to companies, who had the responsibility to share that with consumers.  Fortis TCI promised residents it would pass on the cut from the 2.5 percent Customs Processing Fee Break directly but said there was a possibility charges would still rise.

“Despite the TCI Government’s 2.5% reduction in the Customs Processing Fee (CPF) on imported products including fuel, electricity bills are likely to increase once oil prices continue to rise.  We believe it is important to share this information so you can prepare as much as possible.”  Fortis said.   “While the savings from the reduced CPF will be passed to customers, our fuel supplier, Sun Oil Ltd., has advised that fuel prices are projected to increase further over the next several months, which will cause an increase in the fuel factor.  This can outweigh the savings on your bill.”

By law FortisTCI is allowed to pass on that cost for fuel, whether that is an increase or a decrease, to consumers through the fuel factor, but that cost is not arbitrary, every month it is validated by the Office of the Energy and Utilities Commissioner to make sure the prices are accurate and fair to consumers.  This means the government is well aware of the rising costs consumers are facing.

FortisTCI had also promised to try to negotiate with Sun Oil for fuel at a reduced cost for more savings but it is unclear if the company, which is the nation’s power supplier was successful.   Regardless, as predicted the fuel factor has risen and the most FortisTCI says they or any consumer can do is conserve.  But with the fuel factor this high, and wages remaining stagnant, residents say there must be some kind of intervention.

Fortunately FortisTCI and residents are not the only ones with a stake in this.  The government, should they choose to, could give companies a greater reduction in the CPF which is currently a 5 percent tax down from 7.5 percent.

The government could also completely and temporarily discontinue its tax on fuel by the gallon.

FortisTCI has been contacted for a comment; the company informs it will issue a statement on the concerns today.