The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Businesses and civil society yesterday united against Grand Bahama Power Company’s proposed electricity rate increases, with some branding it “the last straw” and warning of protests to come.

Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC), and a long-time GB Power critic, told Tribune Business that the new tariff structure would further raise the cost of living in an economy that has been “devastated” by the combination of Hurricane Dorian and COVID-19.

With many businesses still struggling to survive, and high unemployment a serious problem, Pastor Victor argued that the energy monopoly’s application - if approved as is by its regulator, the Grand Bahama Port Authority (GBPA) - would “create an imbalance in the economy” by “sucking out money from non-governmental organisations that is keeping us afloat”.

“All I can say is that we won’t settle for it,” Pastor Victor blasted. “We’re going to vigorously oppose this. We’re going to be holding a press conference on Thursday, a virtual town meeting on the rate increase, and doing protests. There will be a demonstration. We’re going to demonstrate and definitely will be meeting with the Government.

“Here’s what we’re faced with. We’re still recovering from Hurricane Dorian. We’re not out of the pandemic. The economy on the island has been devastated. We believe our unemployment rate is among the highest in the country.”

He added that NGOs such as Rotary International were helping to “prop up” the stricken Grand Bahama economy through home repairs and other Dorian-related activities. “A number of NGOs are still active on the island and pumping money into the economy,” Pastor Victor added. “We’re being kept afloat.

“If you look at the dynamics of the economy, with the increase in electricity rates while all this is going on you’re taking money that is being pumped into the economy into the pockets of the Power Company. It doesn’t make sense. You’re creating an imbalance in the economy. We have challenges with prices in the food store, shipping costs. All this is affecting us.

“When you look at electricity for businesses, that’s going to cause them to put up their prices. They have to put up their prices to reflect the increase, and we will have cost of living increases on the island because the Power Company wants more profits. We have to stop it. This is the last straw for us.”

Pastor Victor said GB Power’s pledges to protect its most vulnerable consumers were “all a ploy” and “a public relations move” as, unlike many other utilities, the base rate increases the more you consume whereas in other countries it is the complete opposite.

“Our tourism industry is in the worst shape it’s been in for decades,” he added. “What’s this going to do to the hotel industry? They’re having enough trouble getting people in their rooms. Something has to be done. There has to be a force at hand somewhere.”

He was far from alone in his concerns. Magnus Alnebeck, the Pelican Bay hotel’s general manager, told Tribune Business that the GB Power proposal amounted to seeking more money from a declining population and business community that was largely relying on equity injections to keep it afloat.

“The most interesting thing in that statement is the line where they’re talking about how demand for power has gone down drastically over the past five years,” he said. “That’s the constant battle we have in Grand Bahama; we’re trying to suck more and more money out of a declining population.

“At the moment we, like everybody else, are at the mercy of owners putting in cash for the privilege of operating businesses in Grand Bahama. That’s the reality.” Mr Alnebeck added that GB Power, as a monopoly and essential service, could easily pass its costs on to customers while Pelican Bay as a competitive business cannot.

GB Power, in seeking to justify increased electricity base rates for certain customer segments, yesterday said the extra funds were required to help maintain its generation and transmission and distribution (T&D) infrastructure as it pledged to invest a total $50m over the next five years in this area - or $10m per annum.

“GB Power has faced significant challenges since our last application in 2015, with impacts from two major unprecedented hurricane events, Matthew and Dorian, and in each case, has responded with quick action to safely restore the Island’s electricity in record time,” said Dave McGregor, GB Power’s president and chief operating officer of Emera Caribbean.

“Despite the challenges, we’ve continued to manage the operations and capital investments to stabilise rates for customers. We know no one wants to see rates increase, but the reality is that we need to continue to invest in our operations to maintain safe, reliable and increasingly renewable electricity service for customers for years to come.”

GB Power, in a statement, said the average increase to the all-in rate for all customers was projected to be 4 percent. It compared this to what it said was an average 8.4 percent inflation rate in The Bahamas over the past several years, although this figure is higher than the ones quoted by the Central Bank and International Monetary Fund (IMF), and there was no explanation as to where it came from.

The electrical utility, meanwhile, said that its electricity rate application would protect the most vulnerable households and individuals in Bahamian society from any rate increase. “The application proposes a 3.2 percent rate reduction for residential customers who consume up to 200 kilowatt hours (kWh) per month, representing about 18 percent of customers,” said Nikita Mullings, GB Power’s chief operating officer.

“In addition, there is no change in base rates proposed for residential customers consuming between 201 to 350 kilowatt hours per month, representing 24 percent of customers. Together, this pricing structure will result in 42 percent of residential customers having a decrease or no change to the base tariff.”

GB Power added that the extent of any rate increase for other residential customers will depending on their monthly consumption. Persons consuming 351 to 800 kilowatt hours per month, representing about 32 percent of customers, will see a base rate increase ranging between 0 percent to 7.5 percent, it said.

The utility continued by saying customers consuming more than 800 kilowatt hours per month, representing about 26 percent of its customers, will experience a base rate increase of 7.5 percent to 8.9 percent. So-called “general service large” customers will see an increase of 3.5 percent to 4 percent, and commercial customers would feel across-the-board increases of 4.4 percent.

“With regard to fuel cost, we have 80 percent of our fuel needs hedged for 2022 so we can predict that the fuel charge will remain at 10 cents per kilowatt hour through the next 15 months,” added Mrs Mullings.

“This charge has remained fixed at 10 cents since 2016, resulting in fuel rate stability for customers for seven years. To help ensure this fuel rate stability beyond 2022, we will continue to secure competitively priced fuel through our hedging programme going forward.”

GB Power added that its application included a generation plan that compared energy demand forecasts with its current production capacity. “The generation plan shows that, with a notable drop in load over the past five years, there is no need for significant generation investments,” said Mr McGregor.

“However, this is an opportune time to make investments in small utility-scale solar plants where and when it makes sense for our customers from a cost perspective. That is, where the cost of solar would be less than or equal to the cost of fuel.”