The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama Power Company (GBPC) last night said it was confident it can recover its $27.5 million storm restoration costs “without compromising” any aspect of its business, provided there is not another Matthew-type hit before 2022.

The energy utility, in response to Tribune Business’s questions, said it was still recovering the $27.5 million from its customers - but doing so in a way that will not increase electricity prices beyond their currently level for the next five years.

GB Power explained that, instead, it will “mine savings” from its fuel and operating costs to recover the rebuilding of its island-wide transmission and distribution network in the Category Four storm’s wake.

“We haven’t ‘changed our plan’ – we will recover the restoration cost from customers,” the utility said. “But we will do it in a way that results in no increase to the cost of electricity that customers enjoy today.

“That is the challenge that we have been presented with, and we are confident it can be done. We are committing to hold rates steady for five years and, during this period, mine savings out of our operating costs and fuel expense to offset the hurricane costs we need to recover.”

Restoration costs will be included in the ‘Fuel/Other Costs’ portion of customers’ bills starting in January 2017, and are scheduled to be fully recovered by January 2022.

GB Power said its plans depended on Grand Bahama, and its network infrastructure, not having to cope with another hurricane of Matthew’s power before 2022.

“Provided we do not get hit by another natural disaster the size of Matthew, we are confident we will fully recover the restoration expense over the five-year period that we are holding electricity prices flat - without compromising our commitment to a safe workplace, a fair wage, and/or reliable electricity,” GB Power said.

“We will mine the savings out of other parts of our business – most notably operating cost savings, and savings in fuel brought about through our purchasing strategy, improved unit efficiency, and optimised dispatch of our generating assets.

“When Emera purchased GB Power several years ago, our plan was first to improve reliability, then to stabilise rates, and finally to invest in renewables. We are now acting on the second phase of that three-phase plan – we are staying the course despite having been unexpectedly knocked off balance by Hurricane Matthew.”

GB Power added that it had decided to delay implementation of its Hurricane Self-Insurance Fund, a device that would defray future hurricane repair costs, on the grounds that it was “not the ideal time to increase customers’ cost of electricity” in Matthew’s wake.

“We believe this is welcome news to the business community, to potential investors in Grand Bahama, and to residents who may be struggling to recover from the devastation of Hurricane Matthew,” said Archie Collins, GB Power’s president and chief executive, of the cost recovery plan.

“We want our customers to know that we are taking concrete steps toward long-term rate stability, while improving service and strengthening our grid,” said Tony Lopez, GB Power’s chief financial officer.

“Over the past five years, we have worked hard to reduce our cost structure through operational efficiencies, implementation of a fuel hedging programme and effective workforce planning. These efforts support the long-term rate stability commitment we are making today.”