The Tribune

EDITOR, The Tribune.

I GET highly upset every time I see a story in your paper’s Business Section that contains the untrue and inaccurate statement suggesting that the Grand Bahamas Port Authority (GBPA) is the regulator for electricity or telecommunications in Freeport or, of its own volition, has any regulatory powers over these utilities in Freeport.

A simple reading of the Schedules to the Hawksbill Creek Agreement (HCA) will put an end to that theory. Under the HCA, one of the GBPA’s functions is the business licensing authority for anyone wanting to do or doing certain specified businesses within a land mass called the Port Area (a/k/a Freeport/Lucaya).

For certain categories of business that are defined or described in the HCA, the GBPA is given exclusive right to licence such businesses to operate in Freeport/Lucaya.

However, those Schedules were written over 60 years ago and do not take into consideration the more recent movement nationally and internationally towards licensing and regulation by sectoral and other regulators. Thus while a bank might need a GBPA licence to operate in the Port Area, the GBPA has no statutory or other right to regulate such a bank; that is the statutory right of the Central Bank and other designated agencies.

The same rationale applies to a great many other economic or business endeavours in Freeport: lawyers, doctors and other medical professions, accountants, architects, engineers, airports, seaports readily come to mind.

Whatever regulatory authority the GBPA has under the HCA, such as water quality, they are given to the GBPA under regulations issued by the Government, not because of the GBPA’s status as licensing authority. GBPA licensees are no less subject to the laws of The Bahamas as is anyone else carrying on a business or profession anywhere else in The Bahamas and might also be subject to being regulated by a regulatory body or agency.

So this brings us to the reason for this letter arising from the stories in your paper’s Business Section on 14th and 15th November regarding the GB Power Company (GBPC) recovering a purported $25m in Hurricane Matthew restoration costs from its customers in Grand Bahamas (”GB Power: Consumers to pay $25m Storm cost” and “GB Power urged: Don’t seek quick $25m recovery”).

The part that bothered me the most were comments attributed to the chief executive of GB Power, Mrs Sarah McDonald, that GBPC would work with the GB Port Authority, its “regulator”, to determine the most appropriate method for recovering GBPC’s “prudent” restoration costs once all work was completed.

Based on objections raised by East Grand Bahama MP and Deputy Leader of the Opposition, Mr K Peter Turnquest, that GBPC’s shareholders and not its customers should pay the restoration costs, the Tribune queried whether “(t)he situation is likely to revive debate on who should be GB Power’s regulator - the Utilities Regulation & Competition Authority (URCA) in Nassau, which is supposed to oversee the energy sector nationwide, or the GBPA”. The question that all of this raised in my mind was who in Grand Bahama or the Bahamas is looking out for the interests of this company’s customers?

In my opinion, it is unlikely to be the GBPA as the more revenue that GB Power earns, the greater the license fees it pays to the GBPA. Further, if the relationship between the GBPA and GBPC was truly one of regulator and regulated as they would have us believe, there would be no need for the creation of a Regulatory Framework Agreement between them.

Even if GBPC has challenged URCA’s authority to regulate GBPC in the Port Area under the HCA in the Supreme Court, no such restrictions affect URCA’s ability to regulate GBPC in those areas of Grand Bahama outside of the Port Area.

One wonders whether URCA’s Board have taken the time out of their busy schedules travelling first class all over the world at customers expense to ensure that GBPC does not use this situation to take advantage of its customers in east and west Grand  Bahama.

As for the recovery of “prudent” restoration costs, while the service provider can apply to its regulator to recover $25m, an independent and properly informed regulator would most likely not allow recovery of all of those costs depending on the age and condition of poles and other equipment, and those costs that are allowed are likely to be recovered over periods ranging from three to ten years or more.

All of this would require GBPC to make application to an independent regulator under an independent regulatory process that does not currently exist in Freeport.

VINCENT

WALLACE WHITFIELD

Nassau,

November 17, 2016.