The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Electricity Corporation (BEC) “falls down tremendously in applying best practices” because it does not carry out repair work on live lines, its former executive chairman questioning whether plans to introduce this by end-September had “died” with the general election.

Michael Moss told Tribune Business yesterday that by failing to carry out repairs to its transmission and distribution system when it was still “energised”, Bahamian business and residential customers were subjected to more frequent - and unnecessary - power outages while the work was completed.

Revealing that he knew of no other energy utility that in the Caribbean, or developed world, that did not carry out ‘live line’ repairs, Mr Moss said the previous Board had set at target date for BEC to implement the practice.

While he had heard “nothing more” on the initiative, which was left on the table for the Christie government to pick up, Mr Moss was yesterday somewhat in agreement with his successor, Leslie Miller, when it came to tackling BEC’s over $12 million annual overtime bill.

Backing Mr Miller’s assertion that BEC’s overtime bill was equivalent to 20-30 per cent of staff base pay, and that this was “unreasonably high”, Mr Moss said the Board he headed had managed to “noticeabley reduce” such payments when it came to the generation operations.

However, he said BEC would be unlikely to find significant overtime savings elsewhere in its operational structure unless it “radically changes” its existing business model.

Acknowledging the flaws still prevalent in BEC’s operations, Mr Moss revealed to Tribune Business: “BEC falls down tremendously in best practices application. It does not do any live line or distribution work.”

This practice enables the electricity grid to remain on when repair work is done, ensuring consumers still receive power. Its absence results in more power cuts in the areas of the Bahamas where BEC operates.

“I know of no other utility on any of the Caribbean islands, or anywhere else in the developed world, that does not do live line work,” Mr Moss told Tribune Business.

“It avoids interruptions to customers by carrying out work on the line while the system remains energised.

“That remains of concern to me, and there was a target date for the start of live line work before the end of this financial year. That was one of the goals the Board set for management. I have heard nothing more about it, and I’m inclined to believe it died when the previous Board exited the door.”

BEC’s 2012 financial year ends on September 30, meaning the former Board under the Ingraham administration had been focused on ‘live line’ introduction by October 1.

On the overtime issue, identified by the current chairman as a potentially major source of cost savings for BEC, Mr Moss said there were three particular areas where such expenses were incurred - generation, transmission and distribution, and Family Island operations.

And he added: “I would have thought that BEC’s overtime bill would have gone down quite a bit from where it would have been in the past few years.”

He explained that actions taken by the immediate past Board had “significantly reduced overtime expenses” in BEC’s generation operations, due to the resumption of regular maintenance.

Prior to this, BEC’s slow speed generation units at Clifton Pier had suffered frequent breakdowns, requiring technicians to be called in after regular working hours to make the necessary repairs. Maintenance, and improved reliability, had reduced these breakdown and associated overtime expenses.

“Savings in the generation sector should have come about,” the former executive chairman said. “It will be interesting to find out how overtime in the last six months compares to any prior period. There should have been a noticeable reduction in overtime.”

However, Mr Moss said further overtime savings in the other two areas might be difficult to realise.

Transmission/distribution repairs were often required due to factors outside BEC’s control, such as trees falling on lines, contractors cutting through cables and car accidents taking out poles.

And the “peculiar nature” of Family Island operations, where dispersed populations were served by small BEC staffs and miles of transmission lines, also presented challenges when repairs were required. Staff often had to be sent from New Providence when there were major outages.

As a result, Mr Moss told Tribune Business that further overtime savings in the Family Islands would be difficult to realise, unless BEC totally altered its strategy and distribution model.

This, he explained, would involve BEC taking remote, small communities of around 30-40 homes off the distribution grid and fitting them with renewable systems, such as solar panels, something that would likely run into opposition.

“You’d really have to take a novel approach as to how you treat those areas,” Mr Moss added. “You’d have to radically change the nature of the business, and Family Island installation. Without that, there will be no significant reduction in overtime.”

Still, he agreed that Mr Miller and the new Board were right to focus on the overtime issue and potential savings from it.

“It must be sought for,” Mr Moss told Tribune Business, “as there’s usually no need for an enterprise to be paying 20-30 per cent of base pay for overtime.

“The sum is still unreasonably high, and the Board unreservedly needs to give it its attention. There must be ongoing efforts to have it reduced, but I don’t see it as a short-term issue, as it’s already happened.”