Prime Minister Dr. Luc Mercelina addresses Parliament.
~ Outlines 13 recommendations from RAC/BTP ~
PHILIPSBURG–Prime Minister Dr. Luc Mercelina has appealed to the Supervisory Board of Directors (SBOD) of NV GEBE to instruct its Managing Board to correct identified irregularities in the electricity fuel clause.
This correction, he said, should bring the electricity fuel tariff down to 6-7 cents per kilowatt hour, which would result in an estimated 19% reduction in customers’ electricity bills. The reduction is expected to take effect with the July 2025 billing cycle.
The announcement was made on Tuesday during the second day of the Central Committee meeting of Parliament on the draft 2025 budget. Dr. Mercelina said this action follows the findings of a report from Curaçao’s regulatory authority RAC in collaboration with Bureau Telecommunications and Post (BTP) St. Maarten and aims to bring long-awaited relief to residents struggling with high utility costs.
In a letter sent to GEBE on May 22, the prime minister, on behalf of the government as shareholder, shared the RAC/BTP report, which outlines 13 specific recommendations. GEBE is to review the report and provide formal feedback by August 2025.
“In regard to when the people of St. Maarten can expect relief, based on the findings of the report, on May 22, a letter was sent from the prime minister, being myself, on behalf of the shareholders to the Supervisory Board of Directors of GEBE, providing them a copy of the report and requesting that they instruct the Managing Board of GEBE to do two things – to correct the identified irregularities in the fuel clause for electricity, which should result in at least a downward correction of the electricity tariff to 6-7 cents per kilowatt hour, which would translate to approximately a 19% reduction in the bill fuel clause, effective as of July 2025, in the billing cycle starting from July 2025,” Mercelina told Parliament.
“Let me be very clear. My letter outlines a reduction of the fuel clause effective as of
the July 2025 billing cycle. I expect the SBOD of GEBE to do its utmost to make sure this is realised for the people of St. Maarten who are in dire need of this relief.”
Residents continue to face disconnections and mounting electricity bills, with many unable to pay the required amounts for service restoration. United People’s party (UP) Member of Parliament Omar Ottley, whose question the prime minister was responding to when he provided the information, had said something must be done urgently, especially in light of ongoing complaints and concerns about the Turnover Tax (ToT) being applied twice.
The prime minister later clarified that, as a shareholder, he cannot directly instruct GEBE’s Managing Board but can strongly recommend actions to the SBOD. In response to MPs’ clarification questions, he explained that the May 22 letter shared recommendations from the RAC and BTP, including a proposed reduction to 6-7 cents, which could lower bills by 19%. While not a guarantee, he expressed hope the SBOD would act, given the burden high energy costs place on the people of St. Maarten.
He earlier outlined the 13 recommendations contained in the RAC/BTP final report.
First, it recommends that the regulation of maximum tariffs for fuels used in electricity generation be incorporated within the existing regulatory procedures currently used for gasoline, diesel fuel and liquefied petroleum gas (LPG), which are managed by the minister of Tourism, Economic Affairs, Transport and Telecommunication (TEATT).
Second, it advises that the regulation of electricity and water tariffs be assigned to an independent regulatory body, preferably BTP St. Maarten, as this organisation already holds oversight responsibilities in other sectors.
Third, based on the existing legal framework, the government is encouraged to develop a policy to implement the recommendations in a structured and coherent manner. This policy would also strengthen regulatory capacity and operational oversight.
Fourth, the report calls for a regulatory evaluation that would form the foundation of a sustainable supply agreement between SOL and GEBE.
Fifth, it recommends that GEBE be mandated – under its electricity concession – to develop and submit an optimisation plan for the use of various fuels in electricity generation, with attention to both operational and economic aspects.
Sixth, it proposes that GEBE be tasked with preparing and presenting an Integrated Resource Plan. This plan should outline long-term electricity production goals, including a transition toward renewable energy sources.
Seventh, GEBE is asked to revise the current formula used in the electricity fuel clause to ensure it reflects fair and transparent billing practices.
Eighth, the report instructs GEBE to conduct a high-level cost average analysis for the years 2022 to 2024. This analysis should compare fuel expenses to revenues generated from the electricity fuel clause, as well as other related operational and capital costs.
Ninth, GEBE is requested to initiate or continue the evaluation of electricity base rates, with annual reviews carried out by an independent body.
Tenth, GEBE must also conduct a high-level cost coverage analysis for the years 2022 to 2024 for water-related electricity expenses, comparing them to revenues from the water fuel clause and associated costs.
Eleventh, the company is advised to initiate or continue an evaluation of water base rates, which should also be reviewed annually by an independent regulatory body.
Twelfth, GEBE is asked to develop and propose a complete revision of the current potable water tariff structure.
Thirteenth, the report calls for a timely evaluation of the potable water production model, with a focus on future operations ahead of the expiration of the current water supply agreement with Seven Seas on February 13, 2027.
The prime minister stressed that these recommendations are aimed at the long-term optimisation of both the fuel clause and the overall tariff structure of GEBE.
Source: The Daily Herald https://www.thedailyherald.sx/islands/appeals-to-gebe-to-cut-fuel-tariff-to-6-7-cents-slashing-bills-by-19-from-july-2025-billing-cycle
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