The state-owned electricity company, VINLEC is expected to register a loss of just under $400,000 in 2014, but 2015 is projected to be a better financial year for VINLEC, Prime Minister Ralph Gonsalves has said.
Gonsalves said in his Budget Address recently that VINLEC’s revenue for 2014 was EC$137.4 million but its operational costs (plus finance charges) were $137.9 million.
Gonsalves, who is also Minister of Finance and Minister of Energy, said this was associated, in part, with repairs to the company’s hydro powerplants and the subsidy provided to consumers after the Christmas Eve floods and landslides of 2013.
In 2015, VINLEC is projecting to achieve net earnings of $4.5 million.
“Based on the economic forecasting of the Economic Planning Unit of the Government and the IMF, VINLEC anticipates an increase in electricity sales arising from an expected increased economic activity. Electricity sales for 2015 are projected to grow modestly at 1.5 percent over sales of 2014. The falling oil prices, subsequent to the preparation of the company’s 2015 budget, may impact this projected growth,” Gonsalves said.
He said falling oil prices are good news to the consumer.
“In August 2014, the fuel surcharge to the domestic consumer was 58.67 cents per unit (kilowatt hour); by December 2014, it was 30.7 percent less at 40.65 cents per unit,” he told Parliament.
Gonsalves said 2014, particularly the first six months, was quite challenging for VINLEC as a result of the extreme weather of December 2013, which left damage and loss to the company of and estimated EC$9 million.
VINLEC has spent $2.5 million in repairs to its hydroelectric stations and granted a subsidy of $3.5 million up to June 30, 2014, “so as to defray the increased cost of diesel-generation to its customers at a time of national relief, recovery and reconstruction,” Gonsalves said.
He said that in 2014, electricity sales were affected by the knock-on economic effects, locally, of the continuing global economic difficulties, the economic fall-out from the storm of December 2013, and the high price of diesel for most of 2014.
“The message is accordingly getting home to customers of energy conservation and efficiency. Electricity sales are estimated for 2014 to be 0.6 percent below the 2013 sales,” Gonsalves said.