The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Government yesterday said it has “no intention of allowing Bahamas Power & Light” to impose an extra $5 charge on late-paying consumers and further burden struggling households.

Keishla Adderley, the Prime Minister’s press secretary, told the weekly media briefing that the Davis administration wanted to “make clear” it will not permit BPL to impose such a levy after Shevonn Cambridge, its chief executive, gave the impression this move was imminent.

She said: “There was a report circulating about the possibility of a fee increase on, or late fee implementation, concerning BPL bills. And the administration wants to make it very clear that BPL has no intention, or the administration has no intention, of allowing BPL to impose a $5 late fee on consumers.”

She added that the late fee was among five proposals to reduce BPL’s $100m receivables arrears, owed by consumers and businesses, but the administration “is not minded to add any burdens to consumers”.

She said: “Now the late fee proposal was among five proposals that were put forward as possibilities to try and reduce that $100m. I think it is accounts receivable for the corporation. Now, considering the economic conditions, the administration is not minded to add any burden to consumers.”

BPL, too, yesterday clarified that it has no plans to impose a late fee on consumers at this time. It said: “At a recent Bahamas Institute of Chartered Accountants (BICA] presentation, BPL’s chief executive, Shevonn Cambridge, shared with the body numerous strategies to help the company address its considerable arrears and, at the same time, improve the quality of service to its customers.

“A late fee was discussed as a viable option to prompt timely payments as it is inscribed in BPL’s consumer protection plan and received regulatory approval more than four years ago. However, it was never implemented.”

BPL maintained that the late fee was simply a “discussion point” and not an “immediate consideration”, and that the utility will continue to work with consumers to ensure timely payments. It added: “For clarity, the late fee was a discussion point and is not an immediate consideration for BPL.

“The company continues to work with its customers to ensure timely payments to meet its financial obligations. At the same time, BPL is firmly committed to implementing the best available strategies to ensure effective management as well as improve service to its customers.”

Mr Cambridge’s BICA presentation, though, did not give the impression that the late fee was “a discussion point and not an “immediate consideration”. He said: “BPL’s receivables.. they exceed $100m from residential and commercial customers as of August 2023.

“And while we understand that this may be cyclical based on the current increase in consumption and the glide path fuel recovery strategy, we must reinforce the importance of timely payments to improve collections.

“While we continue to encourage on time and consistent payments from our customers, we struggle in this area as more than 80 percent of our customers pay their bills late and BPL depends on consistent and timely payments to better manage cash flow and adequately fund projects.”

Mr Cambridge said BPL has already received regulatory approval to charge a late fee on overdue bills as a deterrent, and to offset the penalties imposed on BPL when it pays its creditors late due to cash flow issues.

He added: “You can appreciate that there is a time value of money carrying costs associated with late payments. And if we don’t have the money we, too, are subject to additional fees and penalties from our creditors.

“BPL has considered, and already has regulatory approval to implement, a universally-accepted strategy to implement a nominal late fee. A $5 monthly late fee is already in use by many other utilities in The Bahamas. It can be a deterrent to late payments and, at the same time, based on our numbers, it could generate funds to offset the carrying costs associated with those late payments.”

One explanation could be that Mr Cambridge failed to put the late fee in its proper context during his BICA administration. However, this would not be the first time that the Davis administration has backed away from imposing further costs on Bahamian consumers when it comes to BPL.

For it nixed early 2022 plans by BPL’s then-management and Board to raise the fuel charge to just over 13 cents per kilowatt hour, compared to the then-10.5 cents, in a bid to bring the “over and under account” related to the fuel hedge back into balance and get ahead of the increases required to cover rising oil prices. Increasing then would have resulted in less pain this summer, and light bills not going so high.

Ms Adderley, meanwhile, maintained that the Government is concerned with improving BPL’s infrastructure and introducing new forms of energy to ensure service is more reliable and affordable.

She said: “What the administration is doing, as far as BPL is concerned, is improving the infrastructure, making sure that electricity service is more reliable, introducing other forms of energy that will ultimately drive down the cost of electricity for consumers. That is the trajectory. That is not changed, and a $5 late fee is not something that is on the table as far as BPL is concerned.”