The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light’s (BPL) former chief executive warned it cannot afford for the country’s two largest mega resorts to convert entirely to renewable energy because it would lose 15 percent of its revenues.

Whitney Heastie, in an October 28, 2021, letter to Alfred Sears, minister of works and utilities, highlighted the dilemma that BPL - and by extension, The Bahamas - faces as the Government pushes for a cleaner, more sustainable energy future with 30 percent targeted to come from renewable sources by 2030.

What is good for The Bahamas, and its businesses, households and consumers, is not so good for BPL’s financial health and its several hundred staff. Mr Heastie’s warning, contained in a letter tabled in the House of Assembly on Wednesday night, comes as the hotel industry is pressing for an “acceleration” of access to renewable energy sources with BPL’s fuel charge set to increase by up to 163 percent next summer compared to October levels.

Arguing that BPL must be “strategic” in meeting the country’s 20230 renewable goals so as to preserve its own sustainability, the former chief executive wrote: “While BPL seeks to provide firm generation capacity to support the economy of The Bahamas, it continues to work to implement renewables to meet the country’s energy initiative of 30 percent by 2020.

“To sustain monthly expenditures, BPL requires large commercials to remain on the grid, as their financial support is critical to supporting the revenue flow that the other rate classes on their own could not support. Today, the largest two commercials (Atlantis and Baha Mar) provide some 15 percent of BPL’s total revenue.

“The removal of these large commercials’ generating load to renewables would have to be backfilled with financial support from elsewhere as, while generating loads would reduce, BPL’s base cost would remain unchanged. Hence it is important for BPL to be strategic in meeting the renewables goals of the country while ensuring its own financial viability.”

While Atlantis and Baha Mar combined account for nearly one out of every $7 earned by BPL, many observers would argue that the solution lies in the state-owned utility providing cheaper, lower-cost energy and switching to renewable energies itself. They will also likely assert that BPL’s inefficiencies should not be allowed to hold back national progress.

Mr Sears has said BPL is presently working with a private investor to develop a 60 Mega Watt (MW) utility-scale solar farm on New Providence that could slash its annual fuel bill by around $23m. But Mr Heastie’s letter, which remains as relevant today as when it was written, was disclosed just days ahead of BPL’s meeting with the hotel and tourism industry this coming Monday to address concerns over the upcoming hike in its fuel charge for 2023.

For businesses and households that use over 800 kWh, fuel charges are set to increase by 138 percent, 163 percent and 138 percent - more than doubling compared to October 2022’s 10.5 kWh rate - during the periods of March 1to May 31, 2023; June 1 to August 31, 2023, and September 1 to November 30, 2023.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, confirmed that the industry is pushing for a more rapid transition to renewables as a result of these hikes. “The cost of electricity ranks as one of the highest expense items in our budgets due to the fact that operators, particularly in the tourism industry, must maintain a certain level of energy consumption regardless of occupancy in order to protect assets, securitise facilities etc,” he said. 

“Therefore, it is imperative that we find ways to help alleviate the financial burden this represents. Finally, and most importantly, we encourage the acceleration of efforts to ensure industry stakeholders are able to access alternate sources of energy. This is paramount to our ability to diminish our reliance on environmentally unfriendly fossil fuels that contribute to climate change.

“Public and private sector collaboration regarding awareness, understanding, access to capital and the implementation of policies that encourage off-grid energy alternatives are key to ensuring we do not continue to face such financial uncertainties in the future as it pertains to energy costs,” he added.

“Alternative energy initiatives and projects must be front and centre. We must roll out the red carpet, and roll up the red tape for such projects. We look forward to continuing to collaborate with public and private sector regarding this important issue.”

Mr Heastie, meanwhile, said BPL was “open to having a discussion on the pricing” of its base tariff rate and structure which have been unchanged for more than a decade. He added, though, that any changes will have to involve sector regulator, the Utilities and Competition Authority (URCA).