Many Anguillians have been left financially drained after the devastation to personal and collective property caused by Hurricane Irma, the loss of income and dwindling savings caused by the economic impact of the COVID-19 pandemic, the steep increase in fuel prices at the pump brought on by the Russia-Ukraine War, and the newly implemented government revenue-generating Goods and Services Tax (GST). Through it all, we have been able to ‘tighten our belts and keep the lights on’ – somehow.
It had been reported in the media within the last six months, that the Anguilla Electricity Company Limited (ANGLEC) was cash-strapped and, as such, had difficulty meeting its financial obligation to its diesel creditors. It is also well-documented that some of ANGLEC’s largest customers have huge outstanding arrears which, if paid, could help the company to have some liquidity.
The Anguillian caught up with ANGLEC’s newly-appointed CEO, Mr Sutcliffe Hodge, and learned that once again, ANGLEC finds itself cash-strapped and has to increase the fuel surcharge, effective Monday, August 1, 2022.
Mr Hodge said that: “Most people are aware of the extremely high fuel prices on the open market and how that has impacted the fuel prices that we are experiencing here in Anguilla. It certainly has impacted the operating cost of ANGLEC in terms of diesel fuel used to power the generators.
“A substantial amount of ANGLEC’s cash is used every month to pay for diesel fuel. In recent times, it has gotten so bad that more money has been spent buying diesel than money collected from customers paying their bills.”
Mr Hodge noted that no business can stay in operation, or would be willing to stay in operation when the cost of providing goods or services exceeds the amount of money that is collected from making those goods and services available to customers.
He stated: “For some time now, ANGLEC has tried to collect all outstanding money that is owed to the company in an effort to help cushion the financial impact of rising diesel prices to the consumer. To this end, ANGLEC has reached out to its largest customer, the Water Corporation of Anguilla (WCA), to collect long outstanding money that is owed to ANGLEC. This has been reported in the news and discussed by Ministers of Government for some time now.
“However, the government’s stance has been that the Government of Anguilla does not owe ANGLEC any money, but rather, it is the WCA that owes ANGLEC money. ANGLEC has reached out to WCA only to be told that they don’t have the money to pay for their outstanding debt owed to ANGLEC.”
Mr Hodge recounted that during a discourse with personnel from the WCA, the comment was made: “Well, Government will pay the bill – eventually.”
He explained: “The problem with that approach is that it exposes ANGLEC to having outstanding debt that is not collected and could become uncollectable. That has a significant impact on ANGLEC’s liquidity, and its ability to pay its creditors on time.
“Some weeks ago, ANGLEC wrote to the WCA – in addition to a number of other large customers who have been tardy in settling their outstanding debt – demanding that the arrears be paid up quickly as ANGLEC is in dire need of cash to pay for fuel. The company was trying everything in its power to not increase the fuel surcharge on the people of Anguilla, especially in a very bad economic environment.
He continued: “The letters were written and hand-delivered to the intended customers, including the WCA. In the case of WCA, correspondence sent to WCA was also copied to the Premier and to the Minister with responsibility for WCA.
“Government, recognising the impact of having the water turned off, committed to paying EC$500,000 – some of the money owed by the WCA – the day before the electricity for the WCA was to be disconnected. However, Government fell short of paying the EC$500,000 and actual amount paid was EC$441,000 – certainly nowhere close to the amount they had committed to pay. Nonetheless, electricity to the WCA was not supressed at that time.
“Subsequently, another letter was written to the WCA again demanding payment for the outstanding debt. That letter was ignored. There was no response and no communication for eight days. As was also committed in that last correspondence, electricity to the WCA would be turned off at 4:00 pm on Monday, 11th July if the stated amount was not paid. ANGLEC followed through with its decision to disconnect the WCA.”
Mr Hodge explained the dilemma faced by ANGLEC.
He said: “By merely having the WCA operating without payment, the actual cost to ANGLEC – in diesel – to supply electricity to the WCA alone is in the hundreds of thousands of dollars. ANGLEC had to make a decision: Do we continue to allow the WCA to be operating and then find ourselves in a situation where the company does not have enough money to pay for diesel?
“The supplier of diesel to ANGLEC demands payment immediately after pumping fuel, and fuel is pumped 2-3 times per week to keep the generators running. If the outstanding bill is not paid promptly and in full, the company [Delta] refuses to supply diesel to ANGLEC. If ANGLEC does not have diesel to keep the generators running, the entire island would be without electricity.
“So, ANGLEC had no choice but to take the decision that it is better for the company to turn off the supply of electricity to the WCA than to have to turn it off to the entire island – including the WCA. It was a tough decision to make, but it was a necessary one.
“I think the takeaway that we should all get from this is that we have to be our brother’s and sister’s keeper, meaning, if you consume electricity – residential customers, business customers, government entities and establishments – you must honour the obligation to pay for that electricity. It is like having cogs in a wheel – a wheel might have many cogs in it, but if a few of them are missing, that affects the wheel’s ability to turn.
“I would say to the residents of Anguilla that we are in this together. ANGLEC wants to work closely with the government and the people of Anguilla, but the government and the people of Anguilla must also understand – and I believe they do – that we are going through an unprecedented period of very high fuel prices that unfortunately, is forcing all of us to act responsibly, and regrettably, is forcing ANGLEC to have to increase the fuel surcharge – all in an effort to keep the lights on for everybody.
“We are hoping that this is short-lived, and that the price of diesel fuel and gasoline on the world market will come down over the next couple of months. In any event, ANGLEC is aggressively pursuing other renewable sources of energy that will be implemented in short order and will most definitely bring some economic relief to customers – including the WCA and other government entities.
“So, let us work together collaboratively to get through this difficult period, and let us also work in support of government and its initiatives to help to alleviate some of the pain and stress that we are all going through at this time.”
