The focus on the Barbados Light & Power Company Limited’s (BL&P) insurance of its assets continued to be under the microscope on day six of the electricity rate hearing at Accra Beach Hotel.
This was followed by the start of discussion on matters related to depreciation (reduction in the value of an asset with the passage of time) during the proceedings at the Accra Beach Hotel.
BL&P managing director Roger Blackman completed his testimony, but not before he disagreed with intervenor Ricky Went on the wisdom of the company’s decision to reduce its self insurance fund (SIF) by about $100 million.
The issue occupied the first days of the hearing, and while questioning Blackman, Went said that based on the value of BL&P’s transmission and distribution and generation plant assets, and the more than $50 million left in the SIF, the company should not have reduced the large amount of capital in the fund.
However, Blackman reiterated that based on an assessment by experts it was determined that the SIF was over-capitalised based on the BL&P’s requirement for insurance coverage of its assets.
He said the company’s generation plant was covered by third party insurance, which was “prudent”.
A section of those attending the Barbados Light & Power rate hearing. (Picture by Tonia Atwell)
In the post lunch session, BL&P director of Ricardo Jennings and depreciation expert witness Peter Huck were examined by the company’s lead counsel Ramon Gittens of Clarke Gittens Farmer on technical details related to the company’s submission on depreciation, to the Fair Trading Commission, and its audited financial statements.
Most of their intervenors deferred their cross examination of Jennings and Huck. The hearing will resume at the Accra Beach Hotel on Thursday for day seven of proceedings when the two witnesses will continue to give evidence. (SC)