The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Advocates for an end to Grand Bahama Power Company’s monopoly yesterday said they plan to “intensify” public focus on what they described as its regulatory “dilemma”.

Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC) group, told Tribune Business that the utility is fighting oversight by the Utilities Regulation and Competition Authority (URCA) while at the same time seeking renewal of its East and West End electricity supply agreements.

Both 25-year deals expired in summer 2018 and, while their language could be interpreted as giving GB Power a “right of first refusal” to obtain their renewal, Pastor Victor said recent electricity regulation reforms had created new problems for the company in achieving that goal.

While it might be protected from URCA in Freeport by the Hawksbill Creek Agreement, Pastor Victor pointed out that both East and West End lie outside the Port area and that treaty’s reach. He argued that the Electricity Act 2015 mandates that all electricity suppliers be licensed by URCA, meaning that GB Power would - in the event of its supply deals being renewed - need to obtain approval from the very regulator it has rejected.

Speaking after Carl Bethel QC, the attorney general, confirmed to Tribune Business that his ministry was “reviewing” GB Power’s expired agreements, Pastor Victor told Tribune Business: “I think we’re hopeful that they’re going to have to maker a decision based on the interests of the people.

“When you look at those agreements they were written 25 years ago but don’t address changes in the law since then. There were changes in the law in 2015 with the Electricity Act and, if you look at it, it says no one can get approval to supply electricity to the public without being licensed by URCA.

“It means you must be regulated by URCA. On the one hand GB Power is saying they want to renew these agreements, but they’ve put in a challenge in the courts. You have a dilemma there and we’re going to put more emphasis on that. You say you want to continue supplying, yet you’ve filed a Judicial Review.”

GB Power’s Supreme Court action, filed in 2016, is founded on the notion that it is regulated under Freeport’s founding treaty, not the Electricity Act 2015, meaning that the Grand Bahama Port Authority (GBPA) - not URCA - is responsible for its supervision and oversight.

The action remains live, with no resolution to-date despite talks between GB Power, URCA and their respective attorneys. Several observers have suggested to Tribune Business that it could be used as a bargaining chip, with GB Power offering to end it and accept URCA’s oversight in return for a renewal of its East and West End deals.

West End, in particular, could be lucrative if the $2.8bn revival of the former Ginn project takes off, but any GB Power acceptance of URCA’s oversight could open up another proverbial “can of worms” where the GBPA, Hawksbill Creek Agreement and other utilities are concerned.

For GB Power is not the first to challenge national regulatory oversight. Cable Bahamas’ Freeport subsidiary, Cable Freeport, has also fought URCA and its Public Utilities Commission (PUC) predecessor over its ability to regulate it within the Port area. A concession by GB Power could thus expose other Freeport-based utilities to oversight by URCA rather than the GBPA.

Pastor Victor, though, expressed doubts that GB Power would ever submit willingly to URCA regulation even if it cost it the renewal of the East and West End agreements. “I don’t believe GB Power will follow through with letting URCA regulate them,” he told Tribune Business.

“That’s why I believe in anything we can do in terms of bringing more attention to it, bringing to the public the need for URCA to regulate - not just in West End and east Grand Bahama but Freeport also. You’re going to see more push from us to deal with Freeport. We’re going to put in a push for Grand Bahama, and to take regulation out of the hands of the GBPA.”

Pastor Victor and the CCC have been backing Northern Bahamas Utilities’ $30m proposal to build two utility-scale solar plants in East and West End, billed as bringing down electricity costs by up to 40 percent, as a means to end GB Power’s monopoly.

He said yesterday that it would be “a sad testament” to the Government if it ultimately decided to renew with GB Power rather than give Northern Bahamas Utilities, a 100 percent Bahamian-owned group, the opportunity to invest in and develop the energy sector while keeping all profits in The Bahamas.

“The mere fact they have not made a decision means what we’re doing has brought attention to it, and they really have to carefully decide what they’re going to do,” Pastor Victor said of the Government.

“We’re prepared to intensify our campaign no matter what decision they make. We really have to fight for the customer, both residents and businesses. We have to fight for them.”

Pastor Victor added that the CCC planned to deliver a further batch of letters from Bahamians supporting the break-up of GB Power’s energy monopoly to the respective MPs for West and East End, Pakeisha Parker-Edgecombe and K P Turnquest, deputy prime minister, this coming Monday.

As previously revealed by Tribune Business, the expired East and West End supply agreements contain a potential obstacle for rival electricity suppliers seeking to break-up GB Power’s island-wide monopoly as they contain language that could be interpreted as giving it a “right of first refusal” on any renewal.

GB Power, then Freeport Power, agreed to expand beyond the Port area in 1993 to meet the then-Ingraham administration’s desire for the electrification of East and West End. Tribune Business has obtained copies of the two 25-year agreements, one dated June 23, 1993, and the other August 31, 1993, that effectively gave it a 25-year monopoly on Grand Bahama’s energy market.

Using virtually identical terms, the agreements gave GB Power “the sole right” to supply electricity outside the Port area. And it was granted similar tax breaks as those enjoyed within Freeport, including exemptions from Customs duty, stamp duty and business licence fees, along with the use of so-called “bonded” goods without penalty.

And both agreements give GB Power an option to renew for a further 25 years, “upon the same terms and conditions”, provided it gives notice of its intention to do so some 60 days before the existing deals expire.

The review by the Attorney General’s Office is likely to be focusing on whether both agreements give GB Power a legally watertight “right of first refusal” that excludes the possibility of any rival operator, Bahamian or foreign, from taking over the contract