The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The battle to regulate Freeport's energy sector will be fought before the Supreme Court on March 2020, the Utilities Regulation and Competition Authority (URCA) has revealed.

URCA, in its just-unveiled 2020 draft annual plan and budget, disclosed that the fight to establish its authority to oversee electricity and all other utilities within the Port area will finally go to trial almost four years after Grand Bahama Power Company (GBPC) first filed its action.

The national regulator said it was "critical" that the dispute with the power company, and a similar action initiated by BISX-listed Cable Bahamas, "be resolved as soon as possible" to ensure that its jurisdiction to regulate both companies - and their respective industries - within Freeport was established beyond any doubt.

"Both matters commenced in 2016 and relate to the jurisdiction of URCA to regulate persons in the Freeport area in Grand Bahama," URCA said. "It is critical to URCA that these matters be resolved as soon as possible.

"In both cases, URCA's jurisdiction to regulate inside the Freeport area is being challenged despite URCA's statutory and regulatory mandate under the Communications Act and the Electricity Act. URCA considers that both enactments unambiguously require URCA to regulate the relevant sectors throughout The Bahamas, inclusive of Grand Bahama, to further the interests of all persons in The Bahamas.

"It is URCA's intention to achieve its mission of 'improving lives through effective utilities regulation' throughout every island of The Bahamas, inclusive of Grand Bahama. The GB Power versus URCA matter is set down for trial to be heard in March 2020, and it is expected that the Cable Bahamas and others versus URCA matter will also be progressed significantly during 2020."

The energy sector battle was sparked by GB Power's original action, filed on July 7, 2016, which challenged URCA's ability to license and regulate it on the basis that this "conflicts" with the provisions of the Hawksbill Creek Agreement as Freeport's founding treaty.

GB Power's position is that itself and the Grand Bahama Port Authority (GBPA) "have been vested with the sole authority to operate utilities", including electricity generation and transmission and distribution, within the Port area until the Hawksbill Creek's expiration in 2054.

It wants a Supreme Court declaration that the Electricity Act 2015 "contravenes the rights and privileges" granted to it by Freeport's founding law, and that URCA has no authority over it - including its operations outside the Port area in east and west End.

URCA, which took almost three years to respond, argued last year in legal filings of its own that Parliament was "constitutionally entitled" to override Freeport's founding treaty when it passed the Electricity Act in 2015.

It is seeking its own Supreme Court declaration that the Electricity Act "applies in its entirety" to Freeport and "prevails" over the Hawksbill Creek Agreement provisions that GB Power is relying upon to resist its jurisdiction.

The national regulator is also arguing that GB Power's stance in refusing to submit to its supervision and licensing powers is "undermining" the Electricity Act and the ability of URCA to perform its mandate in accordance with the National Energy Policy (NEP).

The stage is thus set for a precedent-setting legal fight that will determine whether URCA is truly the national regulator, or if the GBPA has the authority to regulate utilities within the Port area.

The outcome has major implications for the Hawksbill Creek Agreement's survival and integrity, and whether its provisions can be overridden by statutory Acts of Parliament, as well as other utility companies such as Cable Bahamas and the Bahamas Telecommunications Company (BTC).

Cable Bahamas, the BISX-listed communications provider, is asking the same questions as GB Power in its separate legal action - whether URCA has the jurisdiction to regulate its telephony and Internet businesses in the Port area, which are carried out through its wholly-owned subsidiary, Cable Freeport.

URCA, meanwhile, admitted in its draft 2020 annual plan that this year has seen "many challenges" within both the energy sector itself and its ability to regulate the industry. It added that it had faced "various challenges" from both GB Power and Bahamas Power & Light (BPL).