Rules for electricity and drinking water rates set by ACM
On September 30, 2016 the Netherlands Authority for Consumers and Markets (ACM) determined how the rates for electricity and drinking water in the Caribbean Netherlands should be calculated.
ACM has laid this down in a ‘method’, which describes how ACM processes the costs of the utility companies into rates for consumers. The way ACM does this ensures that companies are stimulated to work as efficiently as possible. This is an advantage for the consumer because an efficient company incurs less costs than a company which does not work efficiently. And if the costs of a company become lower, the rates will also become lower. The method also ensures that the utility companies have sufficient income to make investments and to provide a reliable network. The rates for the producers of electricity and drinking water will be set by ACM. ACM will also set the rates which the distributors of electricity and drinking water charge to the consumer.
ACM has to do this in accordance with the BES Electricity and Drinking Water Act [Wet elektriciteit en drinkwater BES]. That act came into force on July 1st, 2016 and especially applies to Bonaire, St. Eustatius and Saba. That act is aimed at realising an affordable, reliable and sustainable supply of electricity and drinking water on all three islands.
This act also ensures the provision of special subsidies by the Ministries of Economic Affairs (for electricity) and of Infrastructure and Environment (for drinking water) in order to bring the rate in line with what consumers in the European Netherlands pay for the fixed costs of the network.
A new rate structure will be introduced, which will ensure that consumers pay a fair rate. Fair, so that the consumer does not pay too much, but does pay for the costs of the network and for the costs of their consumption. The new rates are also fair to the utility companies, because as a result they can maintain the network and make investments. This is in the interest of the citizens on Bonaire, St. Eustatius and Saba because then they can rely on supplies which are reliable and which are produced sustainably.
On July 5th, 2016 ACM published a draft version of the method and discussed it with the utility companies on the three islands and with buyer organisations. Many utility companies and organisations have reacted to this draft version and made suggestions for the final method. ACM established a final method based on the reactions. The method also explains what was done with the reactions and suggestions. The method is the basis for the rates which ACM will set later this year and which will go into effect as of January 1st, 2017.
ACM is currently working on the calculation of the new rates. For this purpose ACM requests financial information from the utility companies. The new rates will be announced by December 2016 at the latest and will go into effect as of January 1st, 2017. The level of the new rates is not known yet. The rate structure is known though. For example, there will be a fixed rate per month for electricity and drinking water and a variable rate for the consumption of electricity and drinking water. The fixed rate is intended for the fixed network costs of the distributors. The variable rate is intended for the production costs of the producers.