PM: GEBE relief must be lawful, sustainable, based on verified data

GREAT BAY--Prime Minister Dr. Luc Mercelina told Parliament that government remains committed to exploring relief for GEBE consumers, but stressed that any measure must be lawful, financially responsible and sustainable.

Responding to questions from Members of Parliament during the public meeting on GEBE, Mercelina said government understands that households and businesses are facing financial pressure. However, he said relief cannot be based on shortcuts, isolated measures or decisions that would destabilize the utility company.

“This is not a question of political willpower, but of responsible utility management,” Mercelina said. “Actions that appear immediate on paper must be backed by real operational improvements.”

“When government refers to relief, it is speaking about measures that can ease the financial pressure on households and businesses, within the utility or through longer-term actions that help stabilize costs,” the Prime Minister said.

He said the recent spike in global fuel prices has placed pressure on both consumers and the utility provider, and that the burden cannot be carried by GEBE alone. According to Mercelina, the Minister of TEATT and the Minister of Finance are reviewing possible options to help ease the impact on consumers.

He stressed, however, that any final decision will depend on technical findings, available resources and what is needed to maintain a stable and financially sound utility sector.

The Prime Minister said relief is possible, but only if it is done within the law and based on verified information.

“Relief is possible, but there is a condition. It must be done in a way that is lawful, financially responsible and sustainable,” Mercelina said.

He explained that under the electricity concession ordinance, tariff adjustments require cost-oriented data from the concession holder. He said BTP has been appointed as the supervisory body to obtain and review that information.

“What we cannot do is repeat the mistakes of the past by taking shortcuts or announcing measures that cannot stand up legally or that would destabilize GEBE,” Mercelina said.

The Prime Minister said government must avoid measures that appear attractive in the short term but create deeper financial or legal problems later. He said relief must be lasting and grounded in a system that works.

Mercelina also addressed proposals such as erasing all arrears or completely removing the fuel clause. He said erasing all outstanding arrears would have a multi-million guilder negative impact on GEBE and is not feasible.

On the complete removal of the fuel clause, Mercelina said such a move is also not feasible because fuel remains the dominant cost driver of electricity generation. He said removing the clause would not eliminate the actual fuel cost, but would instead conceal or shift it, creating an immediate funding gap that GEBE would have to absorb.

According to the Prime Minister, that would quickly undermine GEBE’s financial sustainability and its ability to procure fuel and maintain continuity of supply.

Mercelina also warned against adjusting the fuel clause in isolation without looking at the wider tariff structure. He said the fuel clause is connected to the base rate, demand charges and other allocation mechanisms.

He said changing only one part of the tariff structure could create financial distortion for the utility and unfairness among customer groups.

“Just tackling the fuel cost as a separate entity will not solve the problem. It will make it more complex because one is related to the other,” Mercelina said.

The Prime Minister said government must move away from a “today for tomorrow” approach and instead focus on long-term utility stability. He said St. Maarten still has not fully guaranteed grid reliability even under the current fuel-based system, and that government must therefore work toward both immediate grid stability and long-term sustainability.

He said this includes looking beyond fossil fuel and moving toward renewable energy as part of the country’s future energy strategy.

The Prime Minister also addressed the suggestion of removing Turnover Tax from the fuel price build-up. He said this cannot be done by ministerial decision or by a motion of Parliament.

According to Mercelina, any exemption or removal of TOT from the fuel price build-up would require an amendment to the law, including the full legislative process and approval by Parliament.

“That is the reality of this problem,” he said.

At the same time, Mercelina said the Ministers of TEATT and Finance are actively exploring responsible ways to provide relief on fuel prices. He said this includes examining the legal and fiscal space available and identifying mechanisms that could offer relief without compromising the budget or violating the law.

The Prime Minister said Parliament will be informed once the ministers complete their evaluation and a legally sound option is ready for consideration.

Mercelina also addressed proposals involving government funds, fees and subsidies. He said a proposal for temporary financial relief through a government subsidy was discussed in the Council of Ministers. He clarified that the proposal discussed was approximately Cg. 6 million, not the higher amount referenced by an MP during the meeting.

The Council of Ministers decided that the proposal should be further reviewed and that an alternative proposal should be presented. He said this discussion is ongoing, especially in light of budgetary constraints and the need to determine whether additional funds received from the Central Bank of Curaçao and St. Maarten could be applied to government’s operational priorities.

The Prime Minister said options and proposals reviewed at the time had a direct impact on the financial position of government, the harbor and GEBE. Based on the assessments provided, he said the proposed measures were not considered financially feasible.

He also addressed the possibility of redirecting the concession fee to subsidize electricity bills. Mercelina said doing so would result in a loss to government of approximately Cg. 7.8 million per year. He explained that the concession fee is not paid as a direct cash transfer, but is currently used as a netting mechanism against government’s own utility consumption. For that reason, he said, there is no actual cash movement that a waiver would improve.

However, he noted that if government were to waive the concession fee for a defined period, such as three years, and redirect that amount to bill relief for domestic customers, domestic consumers could potentially see a reduction of roughly 6.5 cents per kilowatt hour. He did not present this as a final decision, but as part of the analysis before government.

Mercelina also confirmed that government reviewed the option of waiving the harbor throughput fee on fuel imports used for electricity generation, which was estimated at approximately Cg. 2.1 million. He said calculations showed the throughput fee represents only a marginal portion of consumer costs.

To put the effect in perspective, he said that on an electricity bill of approximately Cg. 150, the impact would amount to about Cg. 2 to Cg. 3, or roughly US $1.17.

The Prime Minister said government is also being careful with proposals for compensation, bill credits or future tariff reductions. He said any repayment or credit to consumers would reduce GEBE’s future revenue unless there is a corresponding reduction in underlying costs or an external funding source.

He said applying credits as compensation without a clear legal basis, regulatory alignment and external funding would place additional strain on GEBE’s financial sustainability and could affect its ability to meet obligations related to fuel procurement, maintenance and continuity of supply.

Mercelina also addressed calls for an immediate reduction of the 8.5 percent loss factor. He said such a move would overlook the technical, financial and regulatory realities of the electricity system and tariff framework.

He explained that loss factors are not simply numbers that can be reduced by decision alone. They reflect technical losses, commercial losses, grid condition, metering accuracy and enforcement capacity, all of which require sustained capital investment, system upgrades and operational reforms.

The Prime Minister said any unilateral or rapid reduction of the loss factor without first achieving actual loss reductions would merely shift unrecovered costs elsewhere in the tariff system. He said this could undermine cost recovery and financial stability.

Mercelina said the broader tariff framework review will focus on strengthening internal mechanisms such as periodic reconciliations, improved data quality and system upgrades in close consultation with BTP and GEBE. He said government will present concrete and technically validated options once the regulatory and technical assessments have been completed.

The Prime Minister said government’s goal is to provide relief where possible, but not in a manner that violates the law, weakens GEBE’s ability to function, or creates financial consequences that will return to consumers later.

He said the sustainable solution must include deeper structural changes, proper regulation, verified data, improved utility governance and a transition toward more stable and affordable energy options.

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