BEL asks PUC to double COPA to 3cts/kwh

By William Ysaguirre (Freelance Writer)

BELIZE CITY, Thurs. Oct. 29, 2026

   The Belize Electricity Limited (BEL) has requested that the Public Utilities Commission (PUC) double the current monthly limit under the Cost of Power Adjustment (COPA) mechanism from 5 percent of the approved Reference Cost of Power (presently 1.5 cents/kilowatt-hour (kwh)) to 10 percent (or 3 cents/kilowatt-hour), which would increase the average rates to consumers from 44 cts/kwh to 47cts/kwh.

   The PUC introduced the COPA mechanism in August 2026, in response to BEL requests for government assistance to enable the company to pay its arrears to Mexico’s Comision Federal de Electricidad (CFE), to whom the company owed an outstanding balance of around USD$50 million at the beginning of the year. The company pointed out that the proposed increase in the maximum COPA adjustment would not automatically increase customers’ electricity bills by 10 percent, as the COPA adjustment is free of general sales tax (GST), and the PUC would first have to approve any adjustment.

   BEL’s chief executive officer, Lynn Young emphasized that both the government and the company have endeavored as much as possible to not pass on all of the increased cost to customers. He explained the rationale via a ZOOM briefing to the media on Wednesday afternoon, pointing out that although the PUC had already approved an increase in rates last year (which took effect on January 1 this year) to help BEL pay CFE, the company still owes CFE outstanding arrears of USD$20 million for June, July and August. The conditions of the power purchase contract that BEL signed with CFE in 1995 provide for rate increases aligned with the cost of natural gas, as CFE’s gas turbines are fired by natural gas. The agreement also allows CFE to demand payment of arrears; and if BEL is unable to fulfill its commitments, the contract also allows CFE to discontinue service and terminate the contract. Prime Minister Hon. John Briceño had pleaded with Mexican president Claudia Sheinbaum for CFE to grant Belize some grace period to pay off the arrears, and Young said the company had scheduled a meeting with CFE for Thursday, October 29, to work out a payment plan, and that further meetings are scheduled for next week.

   The company has been meeting a series of challenges and rising costs, stemming first from the war in the Ukraine, and then this year from the spike in fuel prices as a result of the war in Iran and the situation in Venezuela. BEL is not alone, as Young noted, “CFE, they are experiencing similar challenges, with natural-gas prices [which] have been climbing. They had some problems related to the heat, as people over there were using more [electricity], due to the heat; so they had some capacity restrictions, and they were having some capacity problems, and so they started to curtail us far more than ever.”

   CFE’s problems have prompted BEL to fast track as much as possible its increase of domestic electricity generation, to give Belize some independence from CFE rates, but it has come at a steep cost. When BEL signed the agreement in 1995, CFE’s price for power was US 3.5 cents/kilowatt hour, but the rate was linked to the world price of fuel; and with oil prices pushing upward to UD$100/barrel, CFE rates have skyrocketed to USD$1.00/kwh during peak hours, which is considerably more than BEL’s average rate to consumers of BZ 44cents/kwh. BEL bought and rented emergency diesel generators, which came online in September. Normally BEL would try to generate maybe 2 to 4 percent of the supply with diesel; but this year they have had to supply 18 percent of the country’s power from diesel, when CFE could not supply us, and that cost of power was double what they normally paid for diesel.

   But even as BEL tried to increase domestic generation to a capacity to serve the entire country, the impact of this year’s Super El Niño phenomenon decreased capacity, as the lack of rainfall failed to replenish the Chalillo reservoir, through which HydroBelize generates power. “We’ve not really had a rainy season at all”, Young lamented. “The result of that is that Hydro is giving us about 50 percent of what we would normally expect this time of year,” he said. With diesel prices at $12.00 per gallon, the cost of electricity from BEL’s generators “ranges from Bze 80 cents to Bze$1.00/kwh,” Young said.

   “In September alone, the cost of power was almost what we are collecting from customers,” Young explained; and in some cases, it is more than what customers are paying. He further noted, “Without the cheaper power from Hydro—and where CFE’s rate normally got cheaper as the weather got cooler, but that hasn’t happened so far — so the COPA adjustment has not helped BEL reduce its CFE arrears as much as was planned.”

   Young went on to add, “Looking at the international news, it doesn’t seem to us that these fuel prices will go down any time soon,” and he said that the company has thus been forced to adjust its plans accordingly. The plan had been to expand domestic generating capacity through large solar arrays, but these may not come online before 2030. In the meantime, BEL has been buying power from small solar arrays, from which power costs 13 cents/kwh, but this is only available during the day when the sun is shining. Larger arrays will require storage batteries to supply power at night. This would allow BEL to discontinue its use of diesel. But the war in Iran has impacted supply chain logistics, which has delayed the acquisition of the equipment to build the large solar array that has been planned. The expansion of data centers in the USA for Artificial Intelligence is also creating competition for power equipment, which is driving up prices, and the demand is affecting the availability of the equipment. With all these delays, the timeline for a generation facility, from concept to the system coming online, is usually about 6 – 7 years, Young said.