The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

HOTEL operators have warning that Bahamas Power & Light’s (BPL) fuel charge “is really killing us” as they again lamented the impact of high electricity costs on sector profitability.

Carlton Russell, the Bahamas Hotel and Tourism Association’s (BHTA) president, told Tribune Business: “This is one of our biggest costs next to labour, and it is a concern with the fuel surcharge in recent months. We look for some sort of relief in the next few months as BPL seeks to get Clifton back up, and obviously the big benefit would definitely come down the road with their 2022 plan as it relates to LNG.

“Energy is one of our biggest costs, and to keep our operation’s sustainability we really have focus on the bottom line. It isn’t how much money you make but how much we can allow to flow to our business.

“If energy is eating up a big amount of that revenue it is a concern to any operator, particularly the small and medium-sized operators. The larger properties are exercising green initiatives to ensure that we are cost efficient, but this fuel charge is really killing us.”

BPL late last year “capped” its fuel charge at 19.15 cents per kilowatt hour (KWh), meaning that it did not pass on all such costs as is its traditional practice.

Whitney Heastie, BPL’s chief executive, in a November 27, 2018, email to Desmond Bannister, minister of works, said December’s fuel charge will be 21.676 cents per KWh, based on a $33.916m fuel burn cost and 156.467 KW hours of power generated.

“Therefore, the fuel charge for December is 21 cents,” Mr Heastie wrote. “However, since the last increase in fuel charges we have not been passing on the full amount. So the last couple of months we have capped the charge at 19.15 cents.”

Mr Bannister confirmed this was so, as October’s $33.916m fuel spend - divided by the 166.467m kilowatt hours used by consumers - resulted in a 21.76 cents per kilowatt hour fuel charge.

He added: “So the fuel charge, based on the total consumption which you will see in December, would have been 21 cents. But BPL doesn’t pass the full amount on. They’ve capped that charge at 19.15 cents. And so, the charge that you actually see, what we call a fuel surcharge, is not a fuel surcharge; it is actually you paying for the fuel that is being used throughout the country.”

Joy Jibrilu, the Ministry of Tourism’s director-general, addressed last Friday’s BHTA meeting on the Bahamas’ tourism marketing campaign featuring Bahamian-American rock star, Lenny Kravitz.

“We are going out there and making a whole lot of noise in the marketplace. The marketing and brand awareness campaign with Lenny Kravitz really hits home. I think it is a great fit and will generate a whole lot of interest. Last year was one of our best years in the last decade. This year promises to be quite strong,” said Mr Russell.