BVIEC Rejects Claims of Heavy Profits
The BVI Electricity Corporation says claims it is making large profits are false, with General Manager Dr Neil Smith warning the utility has faced ongoing financial strain from rising fuel prices, inflation and stagnant base rates. BVIEC says monthly operations sometimes run at a loss and it is working with government on mitigation measures, including a stronger push toward renewable energy.
The BVI Electricity Corporation (BVIEC) has pushed back against public perceptions that it is generating substantial profits, saying the utility has struggled financially in recent years and often operates at a loss. In a recent interview with JTV, BVIEC General Manager Dr Neil Smith called characterisations of the corporation as highly profitable “a shameful fallacy,” and said the company has not made a profit in a long time. “On a monthly basis, sometimes we lose.
And in other cases, we barely meet the expenses,” he said. Smith pointed to several long-term pressures that have eroded the corporation’s finances: decades of an effectively frozen base rate structure, sharp increases in fuel costs, higher consumption levels and inflation-driven rises in the price of spare parts and supplies.
He said fuel accounts for roughly half of the cost of producing electricity for the BVI and that recent geopolitical tensions could push those costs higher. “People use more electricity now than they did 20 years ago… everything is going up around it except our rate structure,” Smith said, noting that while customers see higher bills, much of that rise reflects fuel charges and greater usage rather than increases to the core tariff.
The utility is also grappling with losses from unpaid accounts and what Smith described as a growing problem of “pilferage” — unauthorised connections and theft of electricity — costs that ultimately fall on paying customers. He said the corporation has absorbed much of the financial burden and has been unable to secure a return on equity for some time.
For BVI residents, the BVIEC’s warning highlights two immediate concerns: the potential for continued upward pressure on monthly bills if fuel prices rise further, and the limits on the corporation’s ability to invest in system upgrades and reliability without additional funding or tariff reforms.
BVIEC said it is pursuing mitigation strategies in partnership with the government, including accelerating renewable energy projects to reduce fuel dependence and stabilise costs. Smith indicated the corporation will continue to seek ways to limit the impact on consumers while addressing long-term sustainability and revenue recovery.
Any changes to base rates, subsidy arrangements or investment plans will likely require government consultation and public engagement, with implications for households and businesses across the territory.
Primary source: BVI News