GEBE failed to submit revised fuel clause proposal, BTP now preparing new tariff structure

GREAT BAY--Minister of Tourism, Economic Affairs, Transport and Telecommunication (TEATT) Grisha Heyliger-Marten has disclosed that GEBE failed to submit a government-requested proposal to correct deficiencies in its electricity fuel clause calculation, prompting the Bureau Telecommunications and Post (BTP) to take responsibility for preparing the revised tariff structure, which is expected to be delivered to government within the coming weeks.

The revelation came during Friday's continuation of the 2027 national budget debate, as Heyliger-Marten responded to questions from Member of Parliament Sarah Wescot-Williams concerning the implementation of recommendations contained in the April 2025 RAC/BTP evaluation of St. Maarten's electricity and water tariffs.

The Minister explained that government had required GEBE to submit a proposal addressing shortcomings identified by the regulatory evaluation, including how fuel costs are calculated, electricity losses are treated and the costs associated with producing potable water are allocated.

However, GEBE did not provide the requested proposal.

Consequently, BTP is now preparing the fuel clause tariff structure itself, marking a significant step toward establishing an independently supervised method for determining electricity charges.

Fuel Clause Formula Could Not Be Validated

According to Heyliger-Marten, the RAC/BTP evaluation concluded that GEBE's existing fuel clause formula could not be validated in its present form.

Among the deficiencies identified were a mismatch between the periods used to calculate and recover fuel costs, the allocation of electricity expenses associated with potable water production, and the use of a fixed percentage to account for non-revenue electricity rather than a calculation reflecting actual conditions.

Government's request to GEBE specifically called for a revised methodology addressing these shortcomings, including electricity consumed by GEBE itself, fuel costs associated with Seven Seas, and a correction mechanism for the existing calculation.

The Minister said the formula must be corrected through a verified and legally established methodology rather than by government independently changing individual figures without the necessary regulatory foundation.

New Legal Framework for Electricity Tariffs

Heyliger-Marten also confirmed that BTP has been designated as the independent supervisor under the Electricity Concession Ordinance, responding to one of the central recommendations of the 2025 evaluation.

According to the Minister, government is working toward establishing electricity tariffs through the legal mechanism required under Article 12, paragraph 4, of the ordinance.

The regulatory evaluation found that existing electricity tariffs were not being established in accordance with the prescribed mechanism, which requires tariffs to be determined by a National Decree Containing General Measures, based on cost orientation, with provisions permitting adjustments for social considerations.

BTP is expected to deliver a draft national decree establishing the fuel clause tariff structure within the coming weeks.

This will be followed by a separate draft decree addressing the base electricity tariff and the categorization of utility connections.

The Minister said the new framework will also consider protections for vulnerable consumer categories, including Tariff 60.

Water Production Costs and Seven Seas Agreement

Another issue identified in the evaluation concerns the electricity costs associated with potable water production.

Heyliger-Marten explained that correcting those calculations must be coordinated with a broader review of the potable water tariff structure to avoid unintended consequences for consumers.

She also indicated that the issue must be considered as the Ministries of Public Health, Social Development and Labor (VSA) and Public Housing, Spatial Planning, Environment and Infrastructure (VROMI) negotiate the potential extension of the potable water production agreement with Seven Seas.

The Minister stressed that changes to electricity tariffs and water production costs cannot be considered independently when adjustments to one could affect the other.

Fuel Supply Arrangements Also Under Examination

Turning to fuel procurement, Heyliger-Marten said government must examine the full supply chain rather than focusing exclusively on individual charges.

She noted that the RAC/BTP report found GEBE's fuel procurement prices for light and heavy fuel oil generally followed international market movements, but also identified additional pricing components, including freight, insurance, premium surcharges, procurement costs, Port throughput fees and marketing differentials.

The Minister reiterated her intention to explore alternatives that could provide GEBE with greater control over fuel storage and pipeline infrastructure, potentially allowing more competitive fuel procurement.

She also identified renewable energy, particularly solar generation, as an important component of reducing the country's dependence on imported fossil fuels.

Implementation Must Produce Results

Heyliger-Marten acknowledged that not all recommendations contained in the RAC/BTP evaluation have been implemented.

Some have advanced through the designation of BTP as supervisor, while others require additional financial verification, regulatory decisions or coordination with other ministries.

She also highlighted the need for audited financial information, noting that the regulatory evaluation had identified limitations in the reliability of the quantitative information available.

Government has since required GEBE to provide additional operational, planning and tariff-related information to support effective supervision.

The Minister emphasized that consumers should be able to understand how their utility bills are calculated and have confidence that the charges imposed are justified.

She concluded that government intends to move forward with recommendations that can already be implemented while ensuring that additional reforms are supported by the necessary legal and financial assessments.

"My objective is not to have another report sitting on a shelf," Heyliger-Marten told Parliament.

The Minister said the ultimate objective is to translate the regulatory findings into concrete decisions, improved transparency, more efficient fuel procurement and fairer electricity tariffs for St. Maarten consumers.

‍