The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Consumer confidence in Bahamas Power & Light (BPL) will not be rebuilt overnight, the private sector warned yesterday, even though its “no more load shedding” pledge could be the best Christmas gift.

Jeffrey Beckles, the Chamber of Commerce’s chief executive, told Tribune Business that faith in the state-owned utility’s promises remains in short supply despite the addition of 132 megawatts (MW) in new generation capacity following a summer during which “consumers took it on the chin”.

While applauding BPL for “a step in the right direction” through the Wartsila-supplied turbines’ installation, Mr Beckles said businesses and homeowners “can only hope” that the pledge by the utility’s chairman, Dr Donovan Moxey, holds true.

While the seeming generation improvement has coincided perfectly with the Christmas shopping season, and start of the peak tourism season, Mr Beckles said Bahamians would have “a little bit better appetite” over the extra debt servicing charge set to be added to their light bills if they could see it will ultimately result in cheaper, more reliable energy.

Pointing out that Bahamians had “paid more before and got the mess we have seen”, the Chamber chief urged BPL’s Board and executive management to set out “a very definitive plan” in simple terms that explains to the public why the imminent $650m bond refinance will result in improvements to their quality of life and finances.

“Quite frankly, all we can do is hope,” Mr Beckles said of Dr Moxey’s promise. “It’s one thing to forecast an end to this load shedding, but we can only hope they’ve taken a step in the right direction to mitigate that.

“We’re going on the promise and commitment from BPL that this is a step in the right direction to mitigate these blackout challenges. Let’s be frank. Confidence in BPL is not going to come back overnight. We commend them, but as consumers we’ve taken it on the chin for a long time. It’s not going to come back with this one step in the right direction.

“We encourage them and celebrate them, but want to see them take the next step, and the next step, and the next step. We’re very hopeful. We had a challenging summer, and this [the new generation] has come at the peal of the retail and commercial season,” Mr Beckles continued.

“We can only hope this holds, and that as we get into the peak of the holiday, tourism and hotel season this holds true. We’re going to support them. We’re only consumers and can hope for the best.”

BPL has frequently touted that the more efficient Wartsila engines, besides improving generation reliability, will also reduce energy costs for New Providence consumers by their greater efficiency and reduction in the amount of fuel required to generate the necessary electricity. They also run off cheaper heavy fuel oil (HFO), and will reduce reliance on BPL’s more expensive diesel units.

However, many observers will likely view Dr Moxey as having taken a great chance with his promise. While the new engines may indeed help to reduce, or end, load shedding, which is caused when energy demand exceeds the capacity of BPL’s power plants to meet it, their addition does nothing to address the weaknesses in the transmission and distribution system that have been blamed for the most recent outages.

Desmond Bannister, minister of works, recently said some $222m of the $650m National Utility Investment Bond proceeds will be used to finance long-needed upgrades to BPL’s transmission and distribution system. The need to service this new debt, BPL recently said, will add $27 to the “average household” bill for 10 months in 2020 until the savings produced by the new Wartsila engines offset this extra cost.

No mention has yet been made of what the “average business” may be facing in terms of an increase, and Mr Beckles said yesterday: “One the surface there may not be an issue with raising capital, but no consumer wants to pay more unless there’s a very definitive plan that’s reasonable to see where this money goes. We’ve raised money before.

“As a whole, most Bahamians resent having to pay more as business or general consumers. This is rooted in the fact that we have paid more before and got the mess we have seen. It is hoped that BPL can lay out a clear plan, with regular updates and precise plans, to train the staff and maintain the equipment.

“This way consumers will have an appreciation for the increase now knowing that it will lead to more reliable generation, consistency and lower prices.... Once executive management is able to lay out a clear, sustainable solution for energy production and transmission at a very reasonable rate, consumers and businesses will have a little bit more appetite for why we’re going down this route.”

The Chamber, meanwhile, in a statement yesterday said reliable, consistent power supply was a critical element in maximising Christmas sales and wider economic growth.

“The business community is hopeful that as we are now in the peak of our retail sales year, that this new installation will ensure some level of consistency in power delivery so we can effectively yield this shopping season,” it said.

“Further, as we approach the 2019-2020 tourism season, retailers and service providers hope to be more confident in their planning. Safe, consistent and affordable power supply is critical to our economic success.

Describing the launch of Clifton Pier’s new Station A power plant and its 130 MW as “an impressive accomplishment”, the Chamber added: “After a very challenging 2019, the business community is pleased to see BPL take this necessary step but remains cautiously optimistic as many wait to see how Station A will perform in the coming weeks and months and, ultimately, how this new installation will mitigate the issues that plagued the business community this past summer.

“More importantly, we wait to see how this state-of-the-art installation will contribute to the overall reduction in the cost of energy in New Providence. We are all aware that the cost of energy and its consistent delivery has had a negative impact on the ease of doing business here in The Bahamas, and it would be great to see the costs trending downward sooner rather than later. With New Providence being the economic hub for the country, it is critical that this remains a priority for BPL and the country.”

Urging BPL to further reduce reliance on fossil fuels, given that The Bahamas is aiming to produce 30 percent of its energy mix from renewable sources by 2030, the Chamber added that it was “encouraged to lean that the team from Wartsila has been retained to oversee the day-to-day operations of the new facility, provide the hands on training for our Bahamian staff while ensuring that the maintenance of the new plant is of paramount importance.

“This is critical in order not to repeat the issues of the past, and as we prepare for the next hurricane season which is only a few short months away. And so is peak demand for the summer of 2020.”