GEBE fuel clause reduction
'no real relief' for consumers
~ Board targets Oct. 1 for realistic relief ~
PHILIPSBURG--The 4.5 guilder cents per kilowatt hour fuel clause rate reduction given to residents by utilities company GEBE in July as a measure to combat skyrocketing bills was no real relief because it merely reinstated a previous reduction.
Informed sources told The Daily Herald that GEBE Managing Director William Brooks, on taking office in January 2007, had begun reversing past fuel clause reliefs granted during the time of his now retired predecessor Julius Lambert.
The sources said this did not sit well with the GEBE Supervisory Board of Directors and the board had written to Brooks on the matter.
The sources said Lambert, with the consent of the supervisory board of directors, had given residents a total of 18.8 guilder cents reduction of the basic fuel clause rate between October 2004 and September 2006. The reductions were retracted by Brooks during a time of rising oil prices; he removed two guilder cents from the relief in January 2007 and another 2.5 guilder cents in July 2007.
The restoration of these reductions, it was also explained, resulted in the 4.5 guilder cents mentioned on the utility bills as relief in July. In essence, the 4.5 guilders cents announced by Brooks as relief is nothing less than reinstatement of 4.5 guilders cents of the 18.8 guilder cents relief that had been granted by Lambert.
These relief retractions helped to bolster a gross profit of NAf. 26.8 million in 2007. Compared to the 2006 balance sheet of NAf. 10.6 million in gross profits, the increase is seen as very drastic, especially for a public utilities company that was making enough revenue to cover all cost with the relief dating back to October 2004.
Contacted about the relief “see-saw,” Lambert, now chairman of GEBE’s Supervisory Board of Directors, confirmed that the only real relief given to residents was the reinstatement of the 4.5 guilders cents, bringing the relief back to the 18.8 guilder cents relief that had been in place since September 2006.
This relief, Lambert added, was given after it was realised that the profits were mounting because of the outdated fuel clause system.
Residents are stuck with an outdated fuel clause system that charges consumers much more than the actual increases in fuel prices, which generates excess profits for GEBE.
Lambert explained that the accumulated 18.8 guilder cents in relief granted from 2004 to September 2006 was actually the excess profit generated by the outdated fuel clause system.
He also confirmed that the 2-3 guilder cents relief announced for next month was based on the decreasing fuel prices on the world market.
On the spurt of company profits, Lambert said it was the job of a government-owned utilities company to make enough income to cover its cost and generate sufficient profit for reinvestment, but not excess profit to burden the people it served.
The retraction of the fuel clause relief and restoration of the same were never sanctioned or approved by the Supervisory Board of Directors, making the move against company policy, against the articles of association of the company and against the guidelines of good corporate governance.
This newspaper’s sources said the Board, which sets the annual budget of the company to which the managing director has to adhere, had written to Brooks about these unilateral and illegal actions and had advised him not to take such actions in the future.
Meanwhile, according to Lambert, the board was seeking “realistic relief” for consumers and the assistance of two independent advisors had been retained to accomplish this by September 1, a date that has now passed with no result.
The board has now set a new date, September 19, for the management of GEBE to present a new proposal for a realistic relief. The intention now is that the new relief should go into effect as of October 1 and the board is awaiting the requested proposal supported by the necessary supporting calculations.
