The Fair Trading Commission Act, CAP.326B of the Laws of Barbados

• Jurisdiction: Barbados
• Court: Fair Trading Commission (Barbados)
• Judge: Mrs. Tammy Bryan,Mr. John Griffith,Ms. Ruan Martinez,Mr. Samuel Wallerson,Dr. Simon Naitram
• Judgment Date: 18 October 2021
• Docket Number: NO. FTC/UR/DECBL&P/2021-02

In the Matter of the Fair Trading Commission Act, CAP.326B of the Laws of Barbados;

And in the Matter of the Utilities Regulation Act, CAP.282 of the Laws of Barbados;

And in the Matter of the Utilities Regulation (Procedural) Rules, 2003 and the Utilities Regulation (Procedural) (Amendment) Rules, 2009;

And in the Matter of the Decision of the Fair Trading Commission dated October 21, 2021 on the Barbados Light & Power Company Limited's Application for Approval to Apply the Results and Costs of Hedging to the calculation of the Fuel Clause Adjustment.

Before:

Mrs. Tammy Bryan Chairman

Mr. John Griffith Commissioner

Ms. Ruan Martinez Commissioner

Mr. Samuel Wallerson Commissioner

Dr. Simon Naitram Commissioner

NO. FTC/UR/DECBL&P/2021-02

FAIR TRADING COMMISSION

ORDER

1 UPON READING the Application filed by the Barbados Light & Power Company Limited (BL&P) on May 8, 2020 for approval to apply the results and costs of hedging to the calculation of the Fuel Clause Adjustment (FCA);

2 AND WHEREAS the FCA is approved by the Commission as a principle or formula that the BL&P is permitted to use to pass through the cost of fuel used to generate electricity for use by its customers;

3 AND WHEREAS on October 11, 2013 the Commission reviewed and undertook an analysis of the FCA and issued a Decision and Order for the BL&P to implement a new formula for calculating the FCA;

4 AND WHEREAS by virtue of Section 16 of the Utilities Regulation Act, CAP.282 of the Laws of Barbados, the Commission may, on its own initiative or upon an application by a service provider or consumer review the rates, principles and standards of service for the supply of a utility service;

5 AND WHEREAS in recognition of the issues that have been considered and determined throughout the Consultation for the BL&P Fuel Hedging Application (Consultation Paper dated November 9, 2020: FTC/URD/CONBL& P/2020-01);

6 AND UPON READING AND CONSIDERING the written submissions of the BL&P; The Barbados Renewable Energy Association (BREA); Mr. Hallam Hope (CARITEL); The Ministry of Energy and Water Resources (MEWR); and the Commission's own research.

IT IS HEREBY ORDERED THAT:-

• 1. The BL&P is permitted to initiate a fuel hedging programme on a pilot basis in accordance with the following measures/requirements:

  • i. The duration of the pilot fuel hedging programme shall not exceed 24 months (2 years);

  • ii. The pilot fuel hedging programme shall be limited to no more than 40% of BL&P's fuel volumes being hedged;

  • iii. The results and costs associated with the pilot fuel hedging programme shall be shared evenly (50/50) between the BL&P and the consumer;

  • iv. The Investment Policy Statement (IPS) and all strategies employed therein, including hedging, shall require the prior written approval of the Commission;

  • v. Any amendments to the IPS shall require the prior written approval of the Commission;

  • vi. The BL&P and the Commission shall determine the investment manager;

  • vii. The cost of hedging shall include costs borne by the Commission in the management/establishment of the pilot fuel hedging programme by the BL&P. These costs will be passed to the BL&P, 50% of which will be passed through the FCA;

  • viii. The equation used to calculate the FCA shall be revised to account for:

    • a. the passing...