Smith acknowledges accountability concerns as corporation says it has absorbed $49.8 million in fuel costs
The BVI Electricity Corporation’s latest completed audited financial statements date to approximately 2021, General Manager Dr. Neil Smith acknowledged Tuesday, Aug. 25, as the utility defended its financial management and plans to implement changes affecting high-volume electricity users. Hon. Kye Rymer, Minister for Communications and Works, said the recently approved measure affecting larger consumers would soon take effect.
Smith disclosed the audit backlog during a government press conference after being questioned about BVIEC’s finances and how the public could independently verify financial figures released by the corporation.
Asked for the latest year for which BVIEC had completed audited financial statements, Smith said he believed it was 2021.
The disclosure puts BVIEC’s audited financial reporting about five years behind.
Smith attributed the delay partly to BVIEC’s implementation of a new enterprise system intended to integrate work orders, purchasing and other operations. He also said auditing companies had not completed some work as quickly as expected.
The issue came under further scrutiny when Smith was asked how the public could independently verify BVIEC’s assertion that it has absorbed $49.8 million in fuel costs on behalf of customers since 2023 without up-to-date audited statements.
Smith acknowledged the concern.
“I agree with you 1,000%,” he said when pressed about the need for current audits.
Smith said BVIEC employs professional accountants who are required to meet professional standards and said previous audits had not found material discrepancies with the corporation’s internal reporting.
Still, he acknowledged that the absence of current audited statements creates a vulnerability and said BVIEC is working to address the backlog.
The disclosure came as officials defended changes affecting some of BVIEC’s largest electricity consumers.
Smith said the corporation has operated for decades under electricity rates that have not kept pace with inflation and increasing expenses for equipment, maintenance, salaries and other operations.
He stressed that increases caused by fuel prices do not translate into additional profits for BVIEC because fuel costs are largely passed through to customers.
“The only thing that changes on your bill is the price of fuel and the amount of energy you use,” Smith said.
Meanwhile, BVIEC must contend with increasing costs to maintain generating units, transmission and distribution infrastructure, vehicles and other equipment, he said.
Smith also argued that the existing rate structure has effectively resulted in smaller electricity consumers subsidizing some larger users because high-volume customers can receive electricity at rates below BVIEC’s cost of production.
The House of Assembly has approved a measure affecting customers using more than 1,500 kilowatt-hours. Asked Tuesday whether its implementation could be delayed because of the current economic pressures facing consumers and businesses, Rymer said the measure was moving ahead.
“It was approved in the House of Assembly, and it would soon be gazetted, so it would be implemented shortly,” Rymer said.
Smith acknowledged that some businesses could adjust their prices in response to increased electricity expenses but encouraged larger consumers to invest in grid-tied renewable-energy systems to reduce their exposure to fuel costs.
BVIEC is also looking to renewable energy as part of its broader financial strategy. Smith said reducing spending on imported fuel could improve the corporation’s finances while limiting the need for increasing operating expenses to be passed on to customers.
