Electricity Customers Benefit From Low Oil Prices

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Oil Prices Continue To Fall

Basseterre, St. Kitts – Nevis
January 23, 2015 (SKNIS)

As oil prices drop on the world market, customers in St. Kitts and Nevis continue to see a reduction in their electricity bills.

Cartwright Farrell, Chief Executive Officer (CEO) at the St. Kitts Electricity Department (SKELEC), stated that customers are benefiting greatly.

“SKELEC residential customers have seen almost 14 percent reduction in their electricity bills due to a reduction in the Fuel Variation Charge (FVC),” Mr. Farrell stated. “The FVC is a direct pass-through cost to the customer that is affected solely by the cost of fuel on the world oil market.”

Prime Minister of St. Kitts and Nevis, the Rt. Honourable Dr. Denzil Douglas commented on the drop in oil prices in his Monthly Press Conference on January 21, 2015.

“The price of diesel will move accordingly as the price for a barrel of oil also moves,” Prime Minister Douglas said. “In St. Kitts and Nevis’ situation, it means that the price for diesel will be reduced and we will be spending generally less money for purchasing the fuel irrespective of what is the credit and upfront payment ratio. What that means is that your energy consumption part of the electricity bill will be less and your overall bill will then be reduced.”

Mr. Farrell explained that “in September 2014, the FVC fell to 24 cents per kWh and fell further to 11 cents per kWh in January 2015.”

He further explained that a “survey was carried out by SKELEC for residential customers sampled at 300 kWh per month consumption. Customers who consumed 300 kWh in September were billed $281.50 and for the same 300 kWh consumption in January, they were billed $242.”

The Government of St. Kitts and Nevis has in place a Sugar Industry Diversification Fund (SIDF) subsidy that covers at least a portion of the FVC to residential customers. The subsidy is designed to be at a reduction percentage for higher usage and therefore serves to encourage conservation and at the same time provide greater assistance to the less fortunate.

Mr. Farrell mentioned that the household Light-Emitting Diode (LED) lamp exchange programme will assist in the conservation effort which will in turn be rewarded with a higher subsidy for the FVC.

This is a novel programme in its entirety,” he said. “I am not aware of any such programme where such a holistic approach is taken to assist electricity consumers. All residential customers are urged to take advantage of the LED household bulb giveaway by the Ministry of Energy and the SIDF in order to gain even further savings.”

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