peter.christopher@guardian.co.tt
New president of the T&T Manufacturers Association (TTMA), Roger Roach, yesterday called on the Regulated Industries Commission (RIC) to consider a phased increase in electricity rates.
In his inaugural speech as president at the TTMA’s annual general meeting at the Hyatt Regency yesterday, the TTMA President asked the RIC to take stock of the current economic climate before implementing changes to the rates.
He explained that the rate changes, which had been proposed in December, could have a devastating impact on businesses and households alike.
Roach said the TTMA board, on behalf of its membership, commissioned an international accounting firm to conduct an Impact Analysis of the proposed rate hike.
“We understand the role of the RIC and we certainly agree we must all share the burden. However, this extreme proposed immediate increase in the electricity rate for industrial users of between 72 to 87 per cent will lead to socio-economic problems,” said Roach.
In a situation where 100 per cent of costs are passed down the value chain, the consumers can may potentially face a 15 per cent increase in their grocery bills, he said.
Across all residential tiers, the proposed rate hike will drive up electricity bills by 15 to 64 per cent depending on their usage.
He said in the report’s indicative scenario, the average lower middle-income family will face an electricity bill increase of 20 per cent.
“For a more holistic view, the impact of the proposed hike on the average household’s monthly budget was estimated. Under the assumptions of no change in rent or water costs, overall expenses may climb by 5.5 per cent, while discretionary income may potentially dip by 24.7 per cent.”
He added changes could also lead to a potential decline of GDP of 0.66 per cent with a decrease in non-petroleum exports of 1.63 per cent as well as increased unemployment and a rise in core inflation.
“While these percentages may seem small, consider a decline in unemployment of 1.57 per cent on a labour force of 600,000 persons.”
Roach said while the TTMA acknowledged T&T’s electricity rates were among the lowest in the region, he said it served as a crucial boost to business and by extension the economy.
“No one needs to lecture us about the fact that our electricity rate is lower than our regional counterparts. However, this is one of our few competitive advantages.
“We need to take these proposed increases in conjunction with the current issues already challenging citizens within T&T’s macroeconomic context: Rapidly rising inflation rates, last estimated at 8.7 per cent in December 2022; food inflation in particular accelerated to 13.8 per cent; supply chain disruptions driving increased costs and stagnant salaries, which in some cases are insufficient to meet the rising cost of living.
Roger Roach, the 67th president of the TTMA, assumed the role from Tricia Coosal who held the position from 2021 to 2022.