The Tribune

Grand Bahama Power Company (GBPC) and its majority owner were yesterday urged not to target “the shortest period of time” to recover their $25 million in Matthew restoration costs from storm-devastated consumers.

Kevin Seymour, the Grand Bahama Chamber of Commerce’s president, told Tribune Business he “would have some concern” if the utility monopoly and Emera, its 80.4 per cent shareholder, sought to “accelerate” their cost recovery plans.

While GB Power’s 19,000 business and residential consumers will end up paying the restoration costs “one way or another”, Mr Seymour implied that it should avoid imposing any additional tariffs or costs to light bills - at least in the short-term.

Calling for any cost recovery to be spread out, the Chamber chief said: “It cannot be that they expect payback over a short-term period, given the background to the situation.

“If fairness were to be applied to this, and reality applied to this, people don’t have the ability to meet that extra amount that could come down the pike if they do that in a short period of time.

“From a business standpoint, it cannot be - and should not be - that they expect to recoup this cost over the shortest period of time.”

Sarah McDonald, GB Power’s chief executive, had previously pledged to Tribune Business that the utility would avoid any “harmful rate shock” to customers still struggling to recover from Matthew’s devastation.

She added that the company would work with its regulator, the Grand Bahama Port Authority (GBPA), to determine the most appropriate method for recovering its “prudent” restoration costs once all work was completed.

“We’ll work with the GBPA to find a way to recover the prudent costs of restoration, but we don’t want a rate shock that will be harmful to people trying to get back on their feet,” Mrs McDonald emphasised.

However, Emera’s financial filings for the 2016 third quarter confirmed that the rebuilding of GB Power’s transmission and distribution network is estimated to cost $25 million.

“The Q3 2016 results for Emera Caribbean do not include any of the approximate $25 million of restoration costs, which are expected to be capitalised and recovered from customers over time,” Emera said of GB Power.

“The island of Grand Bahama took a direct hit from Hurricane Matthew in October 2016. Property damage on the island is extensive. GBPC’s generation and substation infrastructure generally weathered the storm well.

“However, over 1,500 transmission and distribution poles and related conduits were damaged or destroyed, as were many connections to customer homes,” it added.

“Restoration efforts are well underway, with GBPC’s team being supplemented by over 200 people and over 100 pieces of equipment from other Emera affiliates, including Tampa Electric, Emera Maine, Nova Scotia Power, and Emera Utility Services.”

Mr Seymour said the extent of the damage inflicted by Hurricane Matthew meant that GB Power was always looking at a restoration bill that is “quite high”.

He emphasised that the rebuilding was in the interests of Emera, GB Power and the 19.6 per cent Bahamian minority investors who hold their interest via BISX-listed ICD Utilities, given that it was impossible for the utility to earn money without a transmission and distribution network.

“They are not able to generate revenue with the distribution network being in shambles,” Mr Seymour said. “As long as the poles and high tension cables are down, their ability to generate revenue will be stymied. They therefore have an interest in bringing back their revenue supply as quickly as they can.”

The GB Chamber added that “in any other business”, it was the responsibility of the owner to spend the necessary money to get key assets back online.

Yet GB Power is a monopoly with no competition, meaning that its regulator, the Grand Bahama Port Authority (GBPA), will play a key role in determining exactly how the utility recovers its restoration costs from consumers, and how much.

Mr Seymour, though, drew a clear distinction between GB Power’s cost recovery plans and the work it has done to re-energise Grand Bahama in Matthew’s wake, helping residents to return to some sense of normalcy.

“The way I would look at this is two-fold,” he told Tribune Business. “It’s important to put things in their proper perspective.

“I would certainly like to extend my sincere commendations, and thanks, on behalf of the business community to Emera for the pace at which they have, and continue, to carry out restoration to-date.

“It’s unmatched in the history of Freeport,” Mr Seymour added, “and had it not been for them and their quick response, we would have been long out of power for many parts of the island.”