Paul Maynard
By SYANN THOMPSON
Tribune Staff Reporter
sthompson@tribunemedia.net
BAHAMAS Electrical Workers Union president Paul Maynard believes Bahamas Power and Light customers will pay more than the predicted increase of $20 to $30 per month on their bills next year.
Mr Maynard said that the government is in a difficult position and while officials are forecasting electricity bills to increase between $20 and $30 – he does not see this happening.
“I think it is more difficult than it seems. People will be paying more than that $30. BEC has $120 million of collectibles owed to them. They are trying to finance $650 million through the rate reduction bonds and the customers paying the fee for the bond. There are some people not paying their (electricity) bill now, that means me and you as customers who pay our bill end up paying for those who are not paying,” said Mr Maynard.
He added: “There are some 120,000 customers, so these customers have their $30 plus interest that have to go to the bank each month. And if there are some 50,000 people who are not paying their bills, the rest of the consumers have to pay for that, so the fees will be spread among those paying.”
Last week, the House of Assembly passed the Electricity Rate Reduction Bond Bill to allow for the government to issue a rate reduction bond fee to be paid by Bahamas Power and Light customers – increasing monthly bills by about $30. This legislation comes as a bail-out to “cash strapped” BPL for the refinancing of some $650 million necessary to repay debt owed to local banks amounting to $320 million and for desperate upgrades. On December 15, the new $90 million-dollar Wartsila power plant engines, which is being tested now, are expected to be in operation. The new Electricity Rate Reduction Bond Bill 2019, similar to the Rate Reduction Act 2015 requires every BPL customer by law to pay the rate reduction bond fee.
Comments
Well_mudda_take_sic 4 years, 11 months ago
This comment was removed by the site staff for violation of the usage agreement.
BahamaPundit 4 years, 11 months ago
Heist Life
concerned799 4 years, 11 months ago
How was BPL every allowed to rack up such huge debts?
Would it not have been better off to have sold it than to be forever paying for its past debt with no guarantee problems will not recur?
observer2 4 years, 11 months ago
So let me do some rough calculations
120,000 but only 50,000 pay there bills
Da loan is $650,000,000, divide dat by 50,000 ppl.
You get $13,000 for each paying customer have to pay off da bond
Say each paying customer pay $30 per month , den dey needs to make 433 payments
Divide 433 by 12 months means it will take 36 years to pay off da bonds dem.
I ain’t even calculate interest at 7%, consultant fees, mismanagement, changes the PLP will make when Dey take over and try fix da mess but only make it worse.
Dis bond just ain’t ga get pay, but Bahamians ga catch hell.
truetruebahamian 4 years, 11 months ago
he says 50,000 NOT paying! Revise your math and read more closely.
observer2 4 years, 11 months ago
Hi Trueblue
Sorry I did get one D in BJC maths at da governments schooling
But you ain needs to be smart or get da mats right to see dey only have tief the $650 millions den turn da lights off again and come for more monies
Ashinnabash 4 years, 11 months ago
Can't take into consideration the amount of Bahamians that will stop paying their bill and go solar
truetruebahamian 4 years, 11 months ago
Sell the facility to a proper supplier/distributor, then those not paying will be cut off until they are paid and running to some government person won't help them at all. They will have to learn to help themselves out of their jam. Also no power to any shanty towns can ever be allowed.
avecbundy 4 years, 11 months ago
Simple math suggests this. Assumption: Loan is $650 million bearing terms of 5% p.a financed over 30 years. This translates to monthly payments of $3,489,340.55 or annual payments totaling $41,872,086.60 needed for debt service (principal and interest).
Using the Minister's calculation of $30 per month, the math seems to confirm, after rounding up and using $3.6 million monthly (instead of the $3.489 million above) to cover debt service is $30 per month arrived at by taking $3.6 million monthly divided by $120,000 accounts monthly.
There are an estimated 120,000 households / accounts in the Bahamas (assuming 50% of whom pay or pay when they want to, or get discounts for not paying when ever they decide to pay). So lets say, for a lower range, 60,000 account holders pay regularly.
The Minister says that the maximum charge will be $30 per month for 10 months.The charge may be correct but certainly NOT the period unless of course there is a plan to sell BPL and thus remove this debt from the public purse or BPL's new plant(s) and technology will increase efficiency that much such that BPL's operating costs will be significantly lowered (fire half the staff) etc.
$30 per month for 10 months for 60,000 accounts is $1.8 million monthly or $18 million (it would be $21.6 million if annually for 12 months).
To get a range of the full charge, if all 120,000 (assuming information from observer is correct) account holders pay, this translates to $3.6 million monthly or $36 million for 10 months (or $43.2 million annually for 12 months). The latter just barely covers annual debt service assumed and calculated to be $41.9 million.
When the 10 months stops in 2020, then what?Tthe minister is not saying no doubt because of the structure of the loan or there are other plans in the pipeline but rest assured there is more to come because BPL is broke. Employee bonuses, full pension and health care paid for by BPL for staff, must stop. The public cannot be expected to pay these benefits for a broke and inefficient company.
Based on the above and what is now known before the unknown is disclosed later, it appears that the monthly charge that will be billed to each of 60,000 to 120,000 customers will be in a range of $15 and $30 monthly, but unless as earlier stated, there are other plans for BEC such as taking private and removing debt from the public purse, these charges will be for a period of 360 and NOT 10 months.
Finally, with all that has taken place and still taking place, not a person at BPL has been held accountable, including the politicians.
I predict that when all is in, the monthly charge for 360 months (30 years) will range between $60 and $120 per customer. BPL will continue to be inefficient unless there are major staff changes at the top or it is privatized. Even if the latter, for sure we will all pay much more.
GOD HELP US ALL. WE ARE WORKING TO PAY GOVERNMENT TAXES AS A RESULT OF POOR DECISIONS.
yeahyasee 4 years, 11 months ago
Agreed I think everyone knows this will last longer than 10 months and will be more than $30/mo.
Like you mentioned NOBODY has been held accountable between both governments and the public is left to foot the bill for them and for those that don't pay their bills. I wouldn't even start on the Employee bonuses, pension and health.
Dawes 4 years, 11 months ago
What Maynard is also not saying is as soon as this bond is passed his union will demand a pay rise as now BPL has plenty money. And as it will be close to election our worthless politicians will give it to them, so we will be back to square 1 in a couple years.
Well_mudda_take_sic 4 years, 11 months ago
The worst case financial modelling done indicates that average billings per customer based on current usage of electricity would increase by well over $100 per month for decades for residential customers and much more than that amount for commercial customers (businesses). This is because of the very large number of politically connected "do-not-disconnect" customers as well as the smaller customer base that would be able to afford to pay the significantly higher electricity consumption costs. Minnis, Andrews, Turnquest, Bannister, Moxey and Heastie need to come clean with the Bahamian people and stop feeding us with their hogwash.
Bahamianbychoice 4 years, 11 months ago
By the amount projected to be raised in the 10 months I am guessing this is a penalty fee or interest payment on the loans to the foreign banks which is about half I believe of what they want to borrow...which my guess is the loans are in default. This additional amount further feeds into the egregious decision making to not allow Shell NA to handle all aspects of the plant planning/construction and generation. This would have allowed the legacy debt to be managed much more effectively at a lower interest rate..lower the amount to be borrowed significantly and ensure Bahamians have more effective power security. Corruption is a serious thing....
The_Oracle 4 years, 11 months ago
No amount of Money thrown at BEC/BPL will ever slow or reverse the monumental failure that it has been, is, and will continue to be unless the mindset that created it is removed. Political and Management, Engineering management. BEC/BPL is polluting the world of Alternate energy, stalling, mis informing, and desperately wanting to control it. Dinosaurs in thinking, slow moving, and destined for extinction. Unfortunately, they are being allowed to take the country with them. Politicians want to give them our money to take with them. A continuation of the recipe for disaster.
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