Minister of Works Desmond Bannister.
SYANN THOMPSON
Tribune Staff Reporter
sthompson@tribunemedia.net
BAHAMAS Power and Light customers will pay for the company’s rate reduction bond for the next 20 years to bail-out the company – but the highest increase in electricity bills is only expected to last through 2020, according to Works Minister Desmond Bannister.
Mr Bannister, closing debate on the Electricity Rate Reduction Bill 2019 in the House of Assembly, said when the bonds are placed customers will pay the fee for the life of the bond, which is 20 years.
However the highest payments will only be the $20 to $30 dollar increase to electricity bills, for 10 months next year.
“The proposed rate reduction bond will be longer (20 years) than what is available to BPL in commercial banking markets (typically less than five years). This means the cost of debt service is spread out over time and is eventually outweighed by operational cost savings from the capital expenditure that is funded by the rate reduction bond. This minimises the cost impact on customers and indeed allows customers tariffs to be reduced over time,” he said.
After BPL customers suffered through one of the worst summers and parts of the fall due to load-shedding this year, Mr Bannister said December’s opening of the $95 million-dollar Wartsila plant is expected to improve the quality of electricity generation to New Providence.
“In the next two years, we should have 250 mega watts of reliable, inexpensive new power, that’s historical, it’s never ever happened in this country before. That is good news for Bahamians. No government in the history of this country has ever accomplished that. It is revolutionary and it’s a new paradigm, it is clean power and reliable power. And this will happen in three weeks when we get that new 132 megawatts online,” he said.
The works minister reminded parliamentarians that for many years New Providence shared the load of the Family Islands which show up in their electricity bills, but he explained that this is necessary.
“As the prime minister indicated, New Providence consumers subsidises the Family Islands. Because we want our brothers and sisters in the Family Islands to pay the same thing we pay here in New Providence and it would be unfair to charge them what power really costs,” said Mr Bannister.
The $650 million dollars used by BPL will go to the company’s debt refinancing, phase two of Wartsila, solar installations and LNG conversion in the Family Islands and installation of smart metres among other upgrades.
Comments
Bonefishpete 5 years ago
Twenty Years bond payback? Now that's kicking the can far down the road.
Chucky 5 years ago
Government should sell bec to a foreign company.
Use the proceeds of sale to pay of debt and the balance into general revenue.
Win win for everyone.
Foreign company will know how to run bec and it will get our idiots out of the mix.
Nobody hamstrung by the bogus debt.
BahamaRed 5 years ago
And once again the goverment levies fees with no thought for the little man.
How does Bannister think it's fair that EVERYONE pay the same amount? A person making weekly minimum wage with a $100 a month light bill can ill afford $30 extra a month. However the person making $900 weekly with a $400 a month light bill probably would adapt to a $30 increase easier.
Common sense would be to tax the bill at a percentage, so that those with lower bills would not be paying the same as someone with a higher bill. I don't see how Bannister those can't think like this... they just charging fees all willy nilly. Gosh I really dislike this government...
Sickened 5 years ago
What we need is to hire Disney to manage our affairs and get rid of governance altogether. We need experts; not politicians.
Well_mudda_take_sic 5 years ago
And just think for a moment: About $200 million of the funds to be raised by the rate 'increase' bonds will be used to pay the outrageously generous pension benefits owed to the very same executives and other employees of BPL/BEC who ran this government owned enterprise right into the ground. Minnis, Turnquest and Bannister are proposing that all but the politically connected 'do-not-disconnect' consumers of electricity simply bend over and take a royal shafting in the form of exorbitant and extortionist light bills for the next 20 years. The vast majority of us are going to find ourselves having to live in darkness for most of the year and sweltering in the heat of summer.
TalRussell 5 years ago
Yeah, no. Somebody needs give these insensitive to the strapped pocketbooks popoulaces at large - comrade crown ministers Imperialists red shirts guard, a fu#king reality head-shake. Has wonder if red guards could be so oblivious to how damn near they are to whats happening around them to a popoulaces at large who is so damn close to a, enough with the reds bullshi# revolt?
John 5 years ago
So how do you sugar coat a 20 year saddle of debt, that will cost the average Bahamian household some $9,000.00, with a sugar coating by saying they will only be feeling the 'pain' for ten months? These politicians ain't real. And the danger of dragging out the loan for so long is that they equipment will be old and antiquated by the time this loan is paid off so another loan will be necessary to replace them.
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