Looking Long Term
RECO expects to not subsidize fuel to customers within several months, become profitable in five years

August 1st, 2008
by Thomas Tomczyk


One of the "problem parcels" on the north shore of SGM

One of the "problem parcels" on the north shore of SGM

RECO is not the old RECO, UPCO is not the old UPCO, BELCO is pretty much the same. Some things change and others remain the same, and nothing changes more quickly than the world crude prices.

According to Roatan Electric Company (RECO) officials, if HonduPetrol fuel prices will remain unchanged and the RECO fuel surcharge will increase from the current Lps. 0.88 to Lps. 3.84 a Kilowatt-hour by September. Still entire RECO’s customer costs (currently 4.22 Lps.) will still be lower than current energy costs on Guanaja (Lps. 8.39 a Kilowatt-hour) and Utila (Lps. 9.55 a Kilowatt-Hour).

Richard Warren, RECO’s president predicts RECO will not be making a profit for another four, five years. “We are looking at 20 years into the future and we want to say then that it was a good investment,” says RECO president.

According to RECO projections peak energy demand on the island is expected to double in 11 months starting in November. The present demand of 10.5 Megawatt will grow to 19.5 Megawatt as six new shopping centers and resorts will come on line. To prepare for this increase demand a brand new Wartsilla 4.5 generator was brought to the island on July 12 and is expected to be placed online by end of October. With RECO’s own 7.3 Megawatt unit available and another 6 Megawatt rental units from Grupo Laeisz.

This investment in new machines and overhauling of old generators wasn’t cheap. According to Richard Warren, Kelcy Warren- RECO’s CO and owner, and Richard Warren’s cousin, has spent $11-12 million in purchasing and maintaining RECO until now and another $5 million will be spent by September. “He’s [Kelcy Warren] got the resources and he’s willing to spend them,” said Richard Warren.

RECO is in the process of looking at finding alternatives and long range plans for power generation on the island. The estimates obtained by RECO for an underwater cable from the mainland range between $35 and $85 million. “That still doesn’t solve our dilemma where to get energy from the mainland,” said RECO GM.

A year-long study has begun on and offshore on the east part of the island to determine feasibility of installing wind turbines. Still, with wind power not being constant, RECO’s GM estimates that only 30% of installed power can be counted on all the time.

RECO has currently four co-generating partners: Coral Cay (200 Kw), Anthony’s Kay (300 Kw), Osgood Cay (50 Kw) and Henry Morgan (300 Kw), all producing as much as 850 Kilowatts. While RECO’s current peak demand is currently around 10.5 Megawatt, the company believes it could rise overnight to 15-16 Megawatts if all requests for power were fulfilled. Energy generation is critical for RECO and Richard Warren promised to buy back excess power from all, even small local generators. “We are in no position to refuse any source of energy,” said RECO’s GM.

RECO’s general assembly and new board election is planned for August 9. [/private]

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