The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

A STRUGGLING and financially burdensome Bahamas Power & Light has been a nuisance for Bahamians for many years, and PowerSecure’s business plan, finally released Wednesday, details in depth the extent of the challenges that plague the company.

“Electricity is a critical problem in The Bahamas,” the company, whose business relationship with the government ended this week.

“Reliability is low, not measured well, and has been characterised as a crisis in newspaper reports. Some areas of The Bahamas have suffered outages as frequently as once a week. Most of the issues of power reliability are a result of poorly maintained and operated generation, transmission and distribution assets and resources. In addition to system issues, customers do not experience consistent, accurate, reliable interactions with the utility, which has led to a customer delinquency rate of 85 per cent.”

A chief problem with BPL, a subsidiary of the Bahamas Electricity Corporation, is that the two major plants – at Clifton Pier and Blue Hills – don’t function the way they were intended.

Clifton Pier plant was intended to cover base load generation but the condition of its assets prevents it from meeting base load demand. As a consequence, the Blue Hills plant, “designed to provide secondary power and peak demand,” has been used to “supplement generation” instead of just providing for peak demand.

This is costly, PowerSecure noted, because the assets at the Blue Hills plant run on an expensive fuel source: automotive diesel oil.

“The Bahamas is lagging in almost every major indicator of utility performance relative to other countries of similar size and maturity in the region and is far behind leading practice in the power sector globally,” PowerSecure noted.

These indicators include average cost in cents per kilowatt hour, fuel costs in dollars per megawatt hour, system losses, generation availability, system load factor, system reliability, labour productivity, incident rate, customer complaints and bad debt.

Fuel costs are the main reason for BPL’s high expenses. Fuel charge, in the utility provider’s 2015 budget, comprised 62 per cent of the cost customers paid.

PowerSecure also said the excess costs were the consequence of oil leaks at Clifton Pier, the limited operations reliability of dirty fuel, the fact that tank cleaning is not performed on regular schedule and “engine cooling water from boreholes has been contaminated with oil resulting in full load limitations,” among other reasons.

Operating units at the Clifton Pier Power Station are aging.

The four Sulzer units at Clifton Pier’s “Building A,” identified as DA5, DA6, DA7 and DA, were installed in 1981 “with an original rated capacity of 10mw each,” PowerSecure noted. “Due diligence indicates these units and their auxiliary equipment are in relatively poor condition due to their age and maintenance practices. Spare parts, especially for controls, are obsolete and extremely difficult to find. BEC staff commented that on a good day the Sulzers might produce a total of 10mw collectively. According to BEC staff, these units have been designated in the past for retirement but continue to operate to meet demand due to the condition of the rest of the generation fleet.” PowerSecure revealed an intention to retire the Sulzer units.

Clifton Pier’s non-Sulzer unit’s controls are also “starting to become obsolete and more difficult to procure.” Indeed, for the various listed units at the Clifton Pier plant, PowerSecure listed a litany of problems impacting them. The DA9 for instance is one of three MAN B&W units held in Building B at the plant that were installed in 1992 and needed numerous repairs, including an auto lubrication system, an exhaust valve, a cooling water piping replacement, a PLC upgrade, overhauled turbochargers, boiler repairs, fuel separators replacement, lube oil fuel separators replacement, viscosity system upgrade, lube oil coolers replacement, crankshaft damper replacement and generator inspection and cleaning, all of which was slated to have been ordered and/or taken place between late 2015 and this year.

“The poor current status of the assets,” PowerSecure said, “causes line losses as high as 15 per cent, a figure well above comparable industry levels of four per cent to seven per cent. This is a costly performance shortfall at current rates, burdening customers with as much as $14 million annually for energy they do not consume.”

Its business plan shows PowerSecure hoped to reduce the cost of electricity rate from about $0.41/kWh in 2012 to $0.236kWh by 2020.

On Wednesday, Minister of Works Desmond Bannister announced that the government’s management services agreement with PowerSecure had been terminated due to alleged breaches of the deal.

PowerSecure has agreed to leave their personnel in place until as late as December 31, 2017, to facilitate an orderly transition, he said.