The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

MAJOR Bahamas-based businesses yesterday said that have seen electricity costs surge as much as 15-30 per cent year-over-year during 2012 to-date, one telling Tribune Business the issue was the "biggest deterrent" to getting into - and running - a company.

AML Foods chief executive and president, Gavin Watchorn, told Tribune Business: "Our spending on electricity is up about 20 per cent over last year." Geoffrey Knowles, operations manager at bottled water producer, Aquapure, told added: "We are about close to 15 per cent higher in electricity costs. We have a big bill, and that 15 per cent translates into a lot of dollars. You are looking at around $6-$7,000 a month more."

Leslie Miller, chief executive of Mario's Bowling and Entertainment Palace, and the Progressive Liberal Party (PLP) candidate for Tall Pines, described high electricity costs as the "biggest deterrent" to running a successful business.

Mr Miller said: "The cost of electricity in the last 12 months has gone up as much as 30 per cent in most instances, and it hasn't stopped.

"The biggest deterrent to running a successful business in the Bahamas today has to be the cost of electricity. I'm not sure that BEC is capable of giving the Bahamian people a proper understanding on how they calculate the fuel surcharge. Major users are being penalised with the system that is in place at BEC, whereas in Florida and the restof the Caribbean you would get a reduction by using more electricity but, because of our inability to have a sufficient supply in this area, we are being hampered by it."

Looking ahead, Mr Miller added: "We may have to exempt BEC form the payment of import, excise and/or Stamp duties on its oil imports, with specific instructions to pass those savings on to Bahamian consumers. We need to retrofit 85 per cent of BEC's apparatus at Clifton with liquefied natural gas (LNG). LNG is the wave of the future. It's the cleanest and cheapest fuel."

The Central Bank, in its monthly economic and financial developments for February 2012, noted that in terms of electricity costs, BEC's fuel charge was higher, on both a monthly and annual basis, by 0.5 per cent and 40.7 per cent, at 26.05 cents per kilowatt hour.

Meanwhile, Superwash's president, Dionisio D'Aguilar, told Tribune Business: "For the first three months of this year, January to March, versus the first three months of last year, our electricity costs are up 24 per cent.

"Electricity goes up for two reasons, you are either paying more or using more. My kilowatt hours consumed is up by just 1.8 per cent. It demonstrates that we are being affected by rising fuel costs again."

Mr D'Aguilar, who is also on the board of BEC, added: "Obviously, if there is a spike in oil prices, there is nothing BEC can do about it. To generate electricity you will need oil and that's going to cost some money.

"BEC has done a commendable job of generating electricity as cheaply as it can. There is a power station at Clifton and one at Blue Hills. The plant at Clifton uses Bunker C fuel, which is probably 30 to 40 per cent cheaper than Blue Hills, which uses diesel.

"Probably a year to 18 months ago, the ratio was 60-40, where 60 per cent of the power was being generated at Blue Hills and 40 per cent at Clifton. The chairman, Michael Moss, has ensured that that ratio was switched. While BEC cannot do anything about the price of oil, it can do something about where it is generating electricity. When they flipped the ratio it made a bigger difference."