From the 19 electricity companies reviewed in the Caribbean Association of Electrical Companies (CARILEC) benchmarking study, GEBE ranked 10th when comparing the cost of electricity to the consumer.
The CARILEC annual benchmarking study compared Caribbean electrical utilities in areas such as maximum electrical demand, number of client connections, number of employees and electricity prices of residential, commercial and industrial clients. The study, which was executed by the internationally renowned consultant group KEMA, compared various aspects of electricity production and distribution throughout the Caribbean.
The 2008 Benchmark Report found the price per kilowatt hour on St. Maarten to be average among the member utilities, ranking #10 out of 19 participants on a scale of high to low.
Benchmarking is important for utilities to be able to measure themselves against companies of similar size and scope in the region. "The value of comparing the electricity prices in Europe or the USA with those of GEBE is limited because of differences in fuels used to generate electricity, technologies applied and economies of scale" explained GEBE’s Commercial Manager Steve Duzanson, "we have to compare our performance with small islands states of similar size and circumstances to accurately measure our progress".
When comparing the total costs of electricity (including fuel surcharges) to the "average" domestic consumer (400 kWh/month) it was found that GEBE’s prices are average. The lowest prices could be found in Trinidad & Tobago, while the highest price for the same group of consumers was recorded in Montserrat. Trinidad & Tobago, with its oil reserves, were found to have the cheapest electricity prices of the entire Caribbean basin followed by EDF, which is subsidized by the EDF operations in France, while the highest prices could be found in Dominica and Montserrat.
Notable in the 2008 study was also the wide range of fuel surcharges invoiced to clients. While most utility companies use a fuel surcharge to compensate for fluctuating oil prices, the fuel clause of the islands surveyed ranged from 0 in Trinidad & Tobago to US$0.42/kwh in Jamaica. Here again GEBE was found to be somewhere in the middle. The disparity in the fuel clauses between the different islands is attributed to the type of fuels used, the production process and the rate structure. In St. Maarten, GEBE produces electricity using mainly heavy fuel oil.
Contrary to what has been stated in the press, GEBE calculates the fuel clause using only the price of heavy fuel oil. The price for the use of light fuel oil for its operations in Saba and Statia as well as with some of the older and back up engines is absorbed by the company and does not affect the consumer’s price.
The price of heavy fuel oil fluctuates with the price of crude oil on the world market. The latter has increased by more than 75% compared to February of this year. It currently stands at approximately $70 per barrel. Consequently, consumers on St. Maarten have seen their electricity bills increased accordingly.
GEBE commissioned a tariff study to review the rate structure of electricity, as well as the calculation of the fuel clause in 2008 during the period of the soaring oil prices that were affecting the community. The study was completed and presented to the GEBE Supervisory Board in 2009.