The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Power Company’s opposition to regulation by URCA further challenges the “validity” of the Government’s Freeport Memorandum of Understanding (MoU), the Opposition’s deputy leader said yesterday.

K P Turnquest, the east Grand Bahama MP, said the utility’s legal challenge to the Utilities Regulation and Competition Authority (URCA) showed that the MoU “does not have the buy-in” of key Grand Bahama Port Authority (GBPA) licensees.

“Obviously, the MoU made some commitments that did not have the buy-in of the licensees in Freeport, the Power Company being one,” Mr Turnquest told Tribune Business.

“As a result, the validity of it is questionable. The Port Authority, in and of itself, does not have the right, as I understand it, to sign away any of the rights licensees may have.”

The MoU between the Government and the GBPA, which was unveiled in early May, agrees fundamental and sweeping reforms to the regulatory and governance structure in Freeport.

It commits the GBPA to far-reaching reforms, and the potential devolution of some of its quasi-governmental powers/regulatory authority, via their ‘harmonisation’ with national laws and government policies/regulations.

The MoU’s clause 1.18 suggests this ‘harmonisation’ will be achieved through “existing independent regulators” such as URCA - a development that is now being directly resisted by the GB Power action.

It is challenging URCA’s ability to license and regulate it, arguing that this “conflicts” with Freeport’s founding law.

The utility provider, in legal documents obtained by Tribune Business, is seeking a Supreme Court injunction to prevent URCA “from regulating, or seeking to exercise licensing and regulatory authority”, over it.

Its amended statement of claim, filed on July 7, 2016, also wants the Supreme Court to declare that GB Power can carry on its business without requiring a public electricity supplier licence from URCA.

GB Power’s action is founded on the basis that, as a Grand Bahama Port Authority (GBPA) licensee, it is licensed and regulated by the latter via the Hawksbill Creek Agreement - and not by URCA and the Electricity Act 2015.

It is arguing that the Electricity Act’s sections 44-46, which give URCA the legal right to licence and oversee energy providers, “are inconsistent, and conflict with, the rights and privileges vested in [GB Power] and the Port Authority” by the Hawksbill Creek Agreement.

GB Power’s statement of claim argues that itself and the GBPA “have been vested with the sole authority to operate utilities”, including electricity generation and transmission and distribution, within the Port area until the Hawksbill Creek’s expiration in 2054.

Rejecting URCA’s attempt to regulate it, GB Power added: “The plaintiff seeks a determination of the issue of whether the defendant is lawfully entitled to license and regulate the plaintiff’s business in the Port area of Grand Bahama, having regard to the rights and privileges vested in” it by the Hawksbill Creek Agreement and license agreements with the GBPA.

As a result, the Power Company is also seeking a Supreme Court declaration that the Electricity Act 2015 “contravenes the rights and privileges” granted to it by Freeport’s founding law.

GB Power’s decision to initiate legal action represents an immediate obstacle to URCA’s fledgling efforts to regulate the entire Bahamian energy sector, which have yet to get past first base.

For the filing coincides with URCA’s initiation of consultation on the very ‘public electricity supplier licence’ that is the subject of GB Power’s action.

This is URCA’s first regulatory action in the energy sector since the Electricity Act, and amendments to its own founding law, transferred such obligations to it earlier this year.

Stephen Bereaux, URCA’s director of policy and regulation, told Tribune Business that the legal action would not impede its efforts to regulate the energy sector outside Grand Bahama.

Pointing out that it was free to supervise Bahamas Power & Light (BPL), which covers the majority of the Bahamas, Mr Bereaux said URCA would respond “appropriately” to GB Power’s action.

“They are free and entitled to seek recourse before the courts if they choose,” he told Tribune Business of GB Power.

“It [the legal action]may impact the work we do on Grand Bahama, particularly the Port area, but we don’t expect it to unduly prejudice what we have to do elsewhere. The Port situation is complex.”