The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Electricity Corporation (BEC) “crisis” is driving entrepreneurs out of business, a leading private sector official warned yesterday, adding that the nationwide electricity bill for his company totalled $600,000 per annum.

Chester Cooper, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business to “imagine” the number of additional employees his BAF Financial company could hire if that sum dropped just 25 per cent.

Saying he found it hard to understand how a monopoly, with some of the highest electricity rates in the Caribbean, continued to sustain heavy losses, Mr Cooper said he regularly fielded calls from entrepreneurs claiming BEC was driving them out of business.

Expressing concern about the unreliability of BEC’s energy supply, as well as its costs, Mr Cooper said “fixing” the Corporation’s woes was now of “grave economic and national importance”, given that it impacted every business and household in the Bahamas (bar Grand Bahama).

With high energy prices making business expansion, not to mention attracting new industries and foreign direct investment (FDI), difficult, Mr Cooper said the ultimate follow-through effect was fewer business opportunities and less job creation.

As a result, he warned the Government and BEC not to increase tariffs to compensate for the Corporation’s $12.7 million first quarter loss, but urged them to see the problems as “a crisis of national proportions”.

“There simply must be the resolves at every level of the Corporation to leave no stone unturned in stabilising BEC, and reducing the suffering to businesses and the public at-large,” Mr Cooper told Tribune Business.

“Fixing BEC is an issue of grave economic and national importance. The cost of electricity is more than double that in the USA and one of the highest in the region.”

BEC’s total price (base tariff and fuel charge combined) normally hovers around $0.40 per kilowatt hour (kWh), and Mr Cooper added: “With its monopoly in place, all industries and business are fully dependent on BEC.

“It makes attracting new industries and foreign direct investments decidedly more difficult. Large businesses cannot afford to absorb this cost. Passing the costs on to consumers in an already high-priced, high-cost environment is simply not an option.

“BEC, therefore, places us in a quite contrary position. If we take this to the logical conclusion, the higher the electricity, the higher the hotel room rate, the less tourists come to the Bahamas, the fewer jobs and fewer opportunities for small business.”

Painfully aware of the ‘real world’ impact on Bahamian companies, Mr Cooper told Tribune Business: “I have heard the cries of many small businesses who are virtually being driven out of business because they cannot afford to pay their electricity bills.

“An enterprising lady, who has had a viable home-based business, called me only last week to bemoan the fact that the BEC bill is so outrageous that there is no way for her to pass the costs on to consumers, so she will have to shut down.

“My BAF electricity bill across the country is $600,00 per annum. Imagine if I could reduce it 25 per cent, the number of additional persons I could potentially employ. Also, due to the long-term nature of my business, this isn’t a cost I can easily pass on,” the BCCEC chairman added. T

“Then I hear of the manufacturer who has done the math and finds that he can run his generator cheaper than paying BEC.

“I can go on with more and more examples. The fact of the matter is that this crisis is impacting real people in very real ways.”

To add insult to injury, to go with its high costs, BEC has in recent years struggled to keep the power on, with increased load shedding - especially during the summer months.

“What is even more troubling to me is the unreliability of the supply,” Mr Cooper said.

“In addition to the cost of acquiring generators, lost equipment and the assessment of the loss due to time wasted in the economy as a result of power outages cannot be easily quantified; not to mention the further drain on the average taxpayers through subsidies. Since BEC has little to no headroom, that $12.7 million loss in the first quarter must also come from the taxpayers.”

And he added: “ I find it hard to comprehend how you can have a monopoly and some of the highest rates in the region, and cannot at least break-even. There are no doubt some inefficiencies that must be found and fixed without delay. “

Looking ahead to a slightly more optimistic future, Mr Cooper said: “I happen to know that some of the Chamber members have made proposals to Government with some creative solutions to the power supply issue.

“ I trust that the executives, the Board and the Government sees this as a crisis of national proportions and look to find solutions - internal and external - to BEC, with great dispatch. The economy simply cannot afford to bear more rate increases.”