Tourism Agency pays $2m electricity bill for 5 hotels

File photo: Chief Secretary Farley Augustine.
File photo: Chief Secretary Farley Augustine.

THE Tobago Tourism Agency Limited (TTAL) has paid more than $2 million to T&TEC for outstanding electricity bills owed by five hotels on the island.

During Thursday’s plenary sitting at the Assembly Legislature, Chief Secretary Farley Augustine said the bills were accrued during the covid lockdown period.

He said TTAL paid electricity bills for the Mt Irvine Bay Hotel, Starfish Hotel, Rovanel’s Resort, Grafton Beach Resort and Half Moon Blue Resorts Limited at an overall cost of $2,173, 512.54.

Augustine said TTAL president Chris James had written to him and Tourism, Culture, Antiquities and Transportation Secretary Tashia Burris on January 24, “detailing the worrisome threat of closure due to the non-payment of reserve capacity rate fees by medium to large size hotel plants on the island.

“These reserve capacity charges accrued significantly during the lockdown period of almost two years.”

He said the reserve capacity is a back-up energy generation capacity that is used in the occurrence of unexpected fault such as the unavailability of a power plant.

T&TEC determines the reserve capacity by looking at the load detail or the types of equipment present on the premises of the customer. Those required to pay the reserve capacity are essentially industrial customers.

Augustine said the rate, once determined, is paid monthly, regardless of the consumption for any particular month.

He added if a hotel has a rate of $30,000 reserve capacity per month, whether that capacity is tapped into or not, that rate is attached to their bill.

“During the covid19 pandemic lockdown for over two years, hotels were required to pay this rate and after much discussion with the board of T&TEC, CEO, Minister of Public Utilities, it was determined by T&TEC that they will not waive the reserve capacity rate for Tobago hoteliers.

“So the qualifying factor was that the hotels had to have had this reserve capacity bill wrapped up over the covid19 period.”

Augustine said almost one year later, on December 12, “TTAL was forced to jump into action as T&TEC was about to disconnect the second largest hotel on the island, owing to non-payment of this reserve capacity rate.”

Minority Leader Kelvon Morris questioned why TTAL felt compelled to bail out the hotel when Burris had said that the accommodation sector received over $300 million in revenue during the October Carnival.

“If the hotels would have had so great of a season that they had such great revenue, what was the reason that Tobago taxpayers money was used to bail out these hotels that we were told did so well in October.”

Augustine responded, “Madam Presiding Officer (Abby Taylor), the hotels had one single period, not even a season, one single period of good occupancy owing to the Carnival. That figure quoted by the secretary of tourism, I believe Madam Presiding officer, spoke to how much the entire space made, not just specifically hotels on the island.”

He added, “One will also appreciate that with two years of lockdown, it meant that these hotels continue to incur debt because they have their long-standing debt to service while at the same time not having any customers.”

Augustine said it has not even been one year since the Tobago economy was fully re-opened.

“You may recall Madam Presiding Officer, it was only in Easter, April of last year that Tobago returned to half of the pre-covid(19) number of domestic flights and only in January of last year, we resumed international flights.

“So we are not a full year yet to April when tourism was considered fully reopened for the tourism sector. In January last year we were still debating and pushing about reopening our beaches so that we can reopen the sector.”

Augustine said given the fallout from covid19, this administration could not allow the hotels to “go down because of reserve capacity charges, which quite frankly should not have been levied against them because those charges, during the covid19 period, were unfair charges.”


"Tourism Agency pays $2m electricity bill for 5 hotels"

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