The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas could start to liberalise its energy sector within 18 months if the political will existed, a leading attorney said yesterday, adding that this nation had to “stop the madness” of spending more than $900 million per annum on oil imports.

Romauld Ferreira, attorney and partner at Ferreira & Company, which specialises in consultancy and environmental issues, told Tribune Business that the first step on this journey was to establish an energy industry regulator that was independent of government.

Mr Ferreira, who together with the German consultants, Fichtner, has just completed a CARICOM study on the energy laws and policies in seven Caribbean countries, said this - combined with legislative and policy reforms - would facilitate “liberalisation” of the Bahamian energy sector.

He added that this would result in the Bahamas Electricity Corporation (BEC) becoming one of many licensed service providers, with independent power producers (IPPs) - including renewable providers - competing to sell electricity to it.

“If we have the political will, it could be done in 18 months,” Mr Ferreira told Tribune Business of potential Bahamian energy industry liberalisation.

“We need to look seriously at an independent regulatory agency for the Commonwealth of the Bahamas, and this regulatory agency, their sole purpose will be to govern energy and the use of energy.”

Whether this regulator was the Utilities Regulation & Competition Authority (URCA) or another body remained to be seen, Mr Ferreira said, referring to previous ‘conflict of interest’ concerns expressed over various appointments at that agency.

Still, URCA was created with one eye on it taking over regulation of the Bahamian electricity and water industries, in addition to its existing communications responsibilities.

Meanwhile, Mr Ferreira told Tribune Business: “We have to liberalise the energy sector so that BEC is just another licensed service provider. They would be a higher tier licensee, but just another service provider.

“They would be regulated by an independent regulatory agency who’d set the prices in the same way Cable Bahamas operates under URCA. That’s one of the key things we have to do.”

The existing Electricity Act also had to be repealed, Mr Ferreira added, as it was created in an age when renewable energy was never envisioned and was now “woefully inadequate”.

Assessing the implications if the Bahamas failed to reform its energy sector, or dragged its feet to lag behind other countries, Mr Ferreira said: “In the Bahamas, our electricity costs are one of the highest in the region. They’re higher than Haiti.

“Haiti is paying less. When there are things like that, you have no other choice because you are haemorrhaging money.”

He added: “The cost of energy is an impediment to growth and development. From an economic point of view we can’t continue this madness, of between $200-$400 million leaving the country [on BEC fuel imports].

“That’s a sizeable amount of money that could be going to other things. To go on paying $0.42 per kilowatt hour doesn’t make any sense.”

Calling for the Government to transform the Ministry of the Environment and Housing into a Ministry of Energy and the Environment, Mr Ferreira said this would give energy reform efforts focus and impetus, as they typically had governments as the “driving force” throughout the world.

“On our list of national priorities this should be number one,” he told Tribune Business. “We’re not going to regenerate the economy unless we make changes to the way we do business. We can’t put our heads in the sand. We have to tackle these issues head on.”