The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribuneedia.net

MIAMI, FL- THE Atlantis and One & Only Ocean Club resorts’ owner has presented the Government with a formal proposal for the properties to generate their own energy, a Cabinet Minister revealed yesterday, noting that high celectricity costs were making it “extremely difficult” for them to survive.

Khaalis Rolle, minister of state for investments, said: “Atlantis just met with the Prime Minister and myself with a proposal to supply its own energy, because the cost of power is making it extremely difficult to survive, doing business in the Bahamas.”

The Paradise Island properties’ owner, Brookfield Asset Management, is a “major investor in alternative energy”, thus ensuring that they will not have to go far to reduce their energy costs.

The proposal by Atlantis’s owner probably helps to explain why the Government is moving with almost-indecent haste to reform the Bahamas Electricity Corporation (BEC), splitting it into two and getting the private sector involved in both its ownership and management.

BEC’s executive chairman, Leslie Miller, recently praised Atlantis as being BEC’s “number one customer”, estimating that the resort, which employees roughly 8,000 persons, paid the Corporation on average $5 million a month for electricity.

“Without Atlantis, BEC would be in serious trouble,” Mr Miller said. “Atlantis pays us, on average, $5 million a month. The lovely thing is they call us and say the cheque is ready, unlike the rest who you have to break down the doors and threaten to turn them off. Atlantis is our number one customer and we thank them for it.”

Thus any move by Atlantis to reduce its reliance on BEC could have major financial repercussions for the Corporation. Based on its 2010 financials, Atlantis’s roughly $60 million annual payments account for over 13 per cent of BEC’s top-line.

If Atlantis and other hotels reduce their BEC dependence by producing their own power, or going to alternative energy - as Baha Mar is planning to do with its $102.3 million seawater district cooling (SDC) proposal - then the Corporation’s position will become untenable.

Loss of its major customers would spell disaster for the Corporation, hence the speed with which the Government is seeking to reform BEC and lower energy costs, ultimately ending its monopoly.

Mr Rolle, speaking at the the 2013 KPMG Infrastructure Summit. noted that the high cost of electricity in the Bahamas presented a challenge when seeking to attract foreign direct investment (FDI.

He highlighted the Government’s effort to restructure BEC, and added: “We are in a globally competitive environment and we have to keep pace with what everyone else is doing, and to ensure that we are at the cutting edge and we remain the most attractive destination for investment and economic development.

“What we are doing now is conducting a number of exercises designed to reduce the burden on the Public Treasury. One is the restructuring of BEC ,so that BEC is in a position to deliver lower cost power to consumers and businesses alike,” said Mr Rolle.