Ottley: St. Maarten must learn from Aruba to bring electricity costs down

GREAT BAY--Member of Parliament Omar Ottley used the continuation of Parliament’s Central Committee handling of the draft 2027 national budget on Tuesday to place St. Maarten’s electricity costs, dependence on imported fuel and relationship with fuel supplier SOL firmly before Government, while urging ministers to examine lessons recently presented to him in Aruba.

Ottley questioned Prime Minister Dr. Luc Mercelina on the status of NV GEBE’s efforts to secure approximately XCG 20 million in financing for additional generators, asking when the generators are expected to be purchased and how the utility intends to secure financing without sufficiently current audited financial statements. He also requested an update on generators previously approved by Parliament through a budget amendment.  

The MP then turned directly to St. Maarten’s fuel arrangements, asking whether the Prime Minister has met with or contacted SOL and what discussions have taken place regarding the country’s dependence on the company for fuel infrastructure. Ottley argued that Government needs a clear understanding of the country’s position and contingency options, particularly because fuel storage facilities used for electricity generation are tied to the supplier.

The issue is significant because NV GEBE has previously explained that its fuel costs are provided monthly by SOL Antilles N.V. and incorporated into the utility’s fuel-clause calculation. GEBE has said the mechanism passes the actual fuel costs billed by SOL through to consumers using its existing tariff formula.

Ottley said Government should therefore examine not only electricity tariffs, but also the price at which fuel used for electricity generation enters the system. He questioned why the 2027 policy approach does not appear to include specific maximum-price controls for heavy fuel oil and light fuel oil imported for electricity production.

He argued that if Government believes electricity tariffs cannot immediately be regulated through the longer-term regulatory mechanism currently being developed, consideration should be given to using existing price-control powers to regulate the fuel component entering electricity generation.

Ottley pointed to The Bahamas as an example worth examining. Official Bahamian fuel-price schedules establish maximum supplier, distributor and retail prices for petroleum products, including fuel sold by SOL Petroleum Bahamas Limited.

A major portion of Ottley’s intervention focused on what he and MP Viren Kotai learned during their September 24 visit to Aruba’s water and electricity utility, WEB. During that meeting, the MPs examined Aruba’s electricity pricing structure, fuel procurement and use of fuel hedging to reduce exposure to sharp changes in international oil prices.

Ottley told Parliament that the comparison with Aruba raised serious questions about why St. Maarten consumers continue to face substantially higher electricity bills. During the WEB meeting, an actual GEBE bill for 867 kWh of consumption totaled approximately XCG 671.84, including XCG 425.84 in fuel-clause charges. Using the figures presented by WEB, comparable consumption in Aruba was calculated at approximately XCG 333.29, including the standard connection fee.

The MP again highlighted Aruba’s use of fuel hedging, under which future fuel costs can be managed to provide greater predictability against fluctuations in international prices. He questioned whether Government and GEBE are willing to explore similar financial strategies for St. Maarten rather than continuing to expose consumers directly to major movements in international fuel costs.

Ottley also noted that WEB representatives indicated they have held exchanges with GEBE and other regional utilities. He questioned why practices that could potentially reduce costs have not been examined more aggressively locally, particularly when utilities across the region are already exchanging information.

The MP further questioned Government’s own rising electricity and water expenditure. He asked for an explanation of budget figures which he said show these costs increasing from approximately XCG 2.6 million in 2025 to XCG 6.4 million, and then approximately XCG 6.9 million projected for 2027. He argued that Government’s own increased utility expenditure demonstrates the wider impact of energy costs on the country.  

Ottley’s questions come as Government itself has acknowledged the effect of imported fuel prices on electricity costs and has stated that St. Maarten needs to reduce its dependence on imported fuel while expanding renewable-energy generation. Government has also designated BTP to provide independent oversight of GEBE, including review of tariff calculations and the fuel-clause methodology.

Ottley maintained that regulatory reform, fuel procurement, alternative energy, GEBE’s generation capacity and the relationship with SOL should not be treated as separate issues. He called for Government to determine what can be changed now, what requires legislation and what lessons can be adopted from neighboring islands to reduce the burden on households and businesses.

His central question to Government was whether it is prepared to actively examine alternatives, including fuel-price regulation and hedging, rather than continuing with a system in which international fuel increases are ultimately transferred to electricity consumers.

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