BVIEC denies profit claims, cites financial strain

The  BVI Electricity Corporation (BVIEC) has rejected claims that it is generating significant profits, with General Manager Dr Neil Smith stating that the utility is facing ongoing financial strain driven by inflation, fuel costs and stagnant electricity rates.

Speaking during a recent interview with JTV, Smith described the perception of high profitability as inaccurate and outdated. “That statement that the BVIEC makes a lot of profits is a shameful fallacy. It’s shameful and it’s false,” Smith said. “We haven’t made a profit in a long time.”

He explained that, in some instances, the corporation operates at a loss. “On a monthly basis, sometimes we lose. We literally lose money. And in other cases, we barely meet the expenses,” Smith stated.

Smith attributed the situation largely to the corporation’s inability to adjust its base electricity rates over several decades. While consumers have seen increases in their bills, he noted that these are tied to fuel costs and usage rather than core pricing. “Any increase in prices that the customer sees is due to increasing cost of fuel and increasing cost of consumption,” Smith said.

At the same time, operational costs have risen sharply. Smith pointed to inflation, noting that the price of key components and supplies has increased significantly in recent years. “I could track inflation between 2018 and 2025… prices for particular spares have gone up by 20-something percent,” he explained.

Higher consumption levels

He added that higher consumption levels have also contributed to financial pressure. “People use more electricity now than they did 20 years ago… everything is going up around it except our rate structure,” Smith said.

The corporation is also contending with losses from unpaid bills and electricity theft. “There is a significant problem with what we… call pilferage. A lot of people take things from us that they don’t pay for,” Smith stated, adding that these costs are often borne by paying customers.

Smith said the BVIEC has absorbed much of the financial burden over the years but warned that the situation is becoming unsustainable. “We do take the burden in our pockets… and for quite some time now… we haven’t been able to get a return on equity,” he said.

The utility is also facing external pressures, particularly from global fuel markets. Smith noted that fuel accounts for roughly half of electricity costs and warned that geopolitical tensions could drive prices higher. “If the cost of fuel goes up… that will affect the BVI,” he said.

BVIEC is now pursuing mitigation strategies with the government, including a greater push towards renewable energy, as part of efforts to manage rising costs while limiting the impact on consumers.