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PRESS RELEASE
FAIR TRADING COMMISSION ISSUES DECISION ON BL&P MOTION TO REVIEW AND VARY THE ESD DECISION
 
The Fair Trading Commission has issued its Decision on the Barbados Light & Power Company Limited (BL&P) Motion to Review and Vary the Decision of the Fair Trading Commission on the Application of the BL&P to Recover the Costs of the 5MW Energy Storage Device (ESD) through the Fuel Clause Adjustment (FCA).
 
Following the Commission’s issuance of its initial Decision on April 13, 2018, the BL&P submitted its Motion on May 18, 2018; this contested part (iii) of the Decision, which addresses heat rate targets. The Motion indicated that the Commission erred when it: misapplied the information which the BL&P provided on determining suitable heat rate targets; and did not allow the BL&P or any party to the consultation to respond to the appropriateness of the methodology applied to set said targets. The BL&P also posited that it would have to choose between cost optimisation, which would benefit customers, or meeting the ascribed heat rate targets, adding that the penalties outlined for not achieving the latter would present financial risk for the company.
 
The Commission conducted a consultation on the Motion. This included an oral hearing for stakeholders, which was held at the request of the BL&P. The Commission also considered its own research on the matter, as well as submissions from Intervenors.
 
In response to the grounds outlined in the Motion, the Commission determined that the consultation process it had undertaken prior to the Decision was adequate when applicable legal principles for consultation were considered; and its duty to consult did not require it to consult on the method to be used to determine heat rate targets. The Commission further determined that the BL&P had failed to demonstrate that the heat rate targets would cause higher fuel costs to customers and prove its assertion of potential financial risk, as illustrated in its Motion.
 
The Commission has therefore varied the Decision as follows:
 
(i) The implementation of a heat rate maintenance/improvement programme shall be restricted to all baseload plant. Heat rate targets shall be based on the prior five (5) years’ heat rate performance. The statistical tools Trend Line Analysis and Integrated Cumulative Sum (CUSUM) shall be utilised to determine heat rate targets. The gross generation shall be used in the computation of heat rates. Targets shall be subject to review annually or as warranted at the discretion of the Commission.
 
(ii) The BL&P shall be required to submit to the Commission the results of standard heat rate tests for all plant/units every six (6) months and no later than 30 days after June 30 and December 31 of each year. Tests conducted shall comply with international performance standards and guidelines. The results of heat rate tests must be signed by the BL&P’s senior management or the contracting party performing the heat rate tests.
 
(iii) The BL&P may apply to the Commission for applicable exemptions, where its operations are considered to be subject to force majeure events. Such requests shall describe the nature of the event, the cause, resolution plan and future mitigation strategies.
 
(iv) The approved heat rate targets are as follows:
  • (Low Speed Diesel 1) LSD1 – 9,067.28 BTU/kWh;
  • (Low Speed Diesel 2) LSD2 – 7,980.52 BTU/kWh; and
  • (Steam Plant) S1 and S2 – 15,370.20 BTU/kWh.
(v) Gas turbine units (peaking units) shall not be assigned heat rate targets.
 
(vi) The Commission requires the BL&P to submit the heat rate performance of all plant/unit on a quarterly basis as part of its continuous regulatory reporting.
 
All other aspects of the April 13, 2018 Decision remain the same.
 
April 23, 2019
 
Nekaelia Hutchinson-Holder
Information Specialist
Fair Trading Commission
Good Hope, Green Hill, St. Michael
E-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Tel.: 424-0260  
 
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