Frequently asked questions about the new tariff system Bonaire electricity and drinking water

Below you will find the most frequently asked questions and answers about the new tariff system for electricity and drinking water for Bonaire.

What changes in the electricity and drinking water tariffs effective from April 1st, 2018?

Effective April 1st 2018 there will be a fixed distribution tariff for electricity and drinking water. And there will be a variable distribution tariff for electricity and drinking water. The fixed distribution tariff covers the costs of the network. Hence, the conduits and pipes, high-voltage pylons, transformers, etc. The variable distribution tariff is the amount that you pay for your consumption, hence the number of kilowatt hours and the amount of cubic metres of drinking water that a consumer consumes.

Will I pay more or less effective from April 1st?

It depends on the amount of electricity and drinking water that you consume and the type of connection that you have.

Almost everybody has the same connection for drinking water. There are different connection capacities for electricity. Most of the households fall in the category of 3.1 or 4.4 KVA. KVA is a measurement for the capacity: the amount of electricity that a consumer or business can use simultaneously (hence at one and the same moment) (Kilo-Volt-Ampere). Whether a household or business actually uses the said capacity is not important: when implementing the connection, it was decided what capacity had to be implemented. The larger the connection capacity, the higher the fixed distribution tariff that is paid monthly by a consumer or business. The variable tariff is the same for everybody. The variable tariff for drinking water is also the same for every cubic metre: the present graduated scale for drinking water (with a higher tariff per cubic metre if more drinking water is consumed) is cancelled effective from April 1st. The law no longer allows for the said graduated scale.

How do I know what my connection capacity is?

In the month of March WEB will inform all consumers of their connection capacity.

What should I do if my connection capacity is not correct?

WEB will provide information about the procedure to, if so requested, change the connection capacity.

What is going to happen with the pagabon tariff?

A consumer with a pagabon does not pay the fixed distribution tariff. Because a pagabon user does need to contribute towards a part of the costs of the network, the pagabon tariff includes a mark-up for the network costs. A pagabon user therefore pays a slightly higher variable distribution tariff than a consumer with a fixed connection. However, on balance the tariff is the same, given an average consumption for pagabon.

Who establishes the tariffs?

The Dutch Authority for Consumer & Markets (ACM), an independent supervisory authority, has the statutory duty to establish cost-covering tariffs. The ACM calculated what it costs to produce electricity and drinking water. The ACM also calculated what it costs to deliver electricity and drinking water to the consumer (distribution). These costs were converted into tariffs: the fixed distribution tariff (to cover the distribution/network costs) and the variable distribution tariff (to cover the production costs). 

What is the difference with the present tariffs used by WEB?

Electricity

So far electricity only has a variable tariff. All costs of electricity are processed in this tariff, including the network costs. If you consume a lot of electricity then you consequently also pay proportionately more for the network than if you consume less electricity. This is not fair. Namely, the network is available to everybody and WEB incurs costs to maintain it. A consumer who is, for example, not on Bonaire for a couple of months, but does have a residence here, pays nothing if he is not on Bonaire. Whilst the network is still available to this consumer and is maintained by WEB. That is why the law opted for a fixed amount per month that everybody pays for the network.

Drinking water 

There is already a standing charge for drinking water at the moment. In addition, there is a variable tariff that increases as you consume more water.

Effective from April 1st, 2018 all consumers will pay the same variable distribution tariff per month for every cubic metre. The price per cubic metre therefore no longer depends on the consumption.

In addition, a fixed distribution tariff is (like now) applicable for the network costs.

Apart from these two tariffs there will also be a tariff for drinking water per truck. This is a tariff per cubic metre of drinking water. This tariff also includes the costs for the transport with the truck.

Why do the tariffs only take effect on April 1st ?

The objective of the Electricity and Drinking Water (BES) Act is that the electricity provision and the drinking water provision on Bonaire is affordable, reliable and sustainable. This Act protects the utilities companies and WEB but also the consumer. Due to the small scale these facilities are relatively expensive. That is why subsidy is available to keep the tariffs affordable. The ACM feels it is important to properly examine the effects of the new tariffs. And that is why it is necessary to offer the relevant Ministries some time to take (subsidy) measures in order to limit the effects. That is why the new tariffs established by the ACM only take effect on Bonaire effective from April 1st.

When will the new tariffs be announced?

The ACM will publish the established maximum tariffs in the week of February 26th. The Ministries of Infrastructure & Water Management and Economic Affairs & Climate Policy will then announce in consultation with WEB what the subsidy measures are and what this means for the tariffs that WEB will charge to consumers and businesses. 

Will there, like in the European Netherlands, be a fixed amount per month and a final settlement per year?

No. Consumers keep receiving a monthly invoice for their consumption and for the standing charge. A final settlement afterwards is not mandatory by law. WEB is free to potentially implement this. However, in that case the tariffs established by the ACM still apply: a fixed distribution tariff per month and a variable distribution tariff for the consumed amount of electricity or drinking water.

Why did WEB increase the electricity tariffs effective January 1st

As long as the tariffs established by the ACM did not take effect yet, WEB can still adjust the tariffs. WEB can, in consultation with the Public Entity as shareholder, decide on this independently.

Why is the tariff system going to change?

On July 1st, 2016 the Electricity and Drinking Water (BES) Act took effect. The objective of this Act is a reliable, affordable and sustainable drinking water and electricity provision on, inter alia, Bonaire.

The legislator intends to realise these objectives through cost-oriented tariffs. This means that the tariffs paid by the consumers are based on the actual production and distribution costs.

The legislator designated the ACM to calculate, as the independent supervisory authority, what the maximum tariffs are that WEB can charge to a consumer.

The reason for the implementation of this new tariff system is that the ACM must calculate the costs that are required for a financially healthy business in an independent way. This is in the interest of Bonaire as this way WEB has sufficient income to maintain the network, to make investments in the network and to purchase or produce electricity and drinking water. On the other hand, the establishment of the maximum tariffs by the ACM also ensures that WEB is not charging more to the consumer than the said maximum (cost-covering) tariffs. The tariffs of the ACM therefore protect both WEB and the consumer.

Are there ways to alleviate the adverse financial consequences for certain groups of people?

In the Electricity and Drinking Water (BES) Act a number of options are provided that can ensure that the financial consequences for certain groups of buyers are limited:

  • The Ministries of Infrastructure & Water Management (for drinking water) and of Economic Affairs & Climate Policy (for electricity) can establish in a Ministerial Decree that a lower fixed distribution tariff applies to certain categories of buyers.
  • The Ministries of Infrastructure & Water Management (for drinking water) and of Economic Affairs & Climate Policy (for electricity) can grant subsidies to certain categories of consumers, which implies that the fixed distribution tariff becomes lower.

In addition, there are possibilities outside the Electricity and Drinking Water (BES) Act. This therefore takes place regardless of the tariffs of the ACM. For instance, WEB could decide to charge lower tariffs than the maximum tariffs established by the ACM to certain categories of buyers. It is also possible that the Public Entity (Society and Care Department) pursues a supporting policy, whether or not in association with the Ministry of Social Affairs.

What is a private consumer and is this still relevant?

The term ‘private consumer’ is not relevant for the new tariff structure. Every consumer and every business pays the same amount per cubic metre of drinking water and per KwH of electricity (the variable distribution tariff). Whether a person consumes more or less drinking water or electricity consequently makes no difference for the amount per cubic metre of drinking water or per KwH of electricity. Of course, the total amount will be higher for someone who consumes more electricity or drinking water than for someone who consumes less drinking water or electricity. 

Moreover, everybody pays a fixed amount (the fixed distribution tariff) per month. This amount depends on the connection capacity: this is almost the same for everyone for drinking water, this varies for electricity. Soon a number of calculation examples will be added to the Q&As.

See also: New tariff system Bonaire electricity and drinking water 2018