The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama's Chamber of Commerce president is "not overly concerned" about the island's energy monopoly adding an extra charge to customer bills on October 1 because the date is not fixed.

Greg Laroda told Tribune Business that his conversations with Dave McGregor, Grand Bahama Power Company's president and chief executive, had encouraged him to believe the utility will further defer its plans to recover up to $15m in Hurricane Dorian restoration costs from consumers if the COVID-19 situation requires it.

He spoke out after the 2020 first half and second quarter results for GB Power's 100 percent Canadian owner, Emera, revealed that its Bahamian subsidiary plans to implement the additional charge on consumer bills in less than two months' time.

Mr McGregor did not respond to Tribune Business phone and e-mail messages seeking comment yesterday, but Emera's results said: "GB Power's [2020] earnings are expected to be consistent with 2019 earnings, which were lower than normal as a result of Hurricane Dorian. The impact of COVID-19 on GB Power is expected to be partially offset by recovery of load following Hurricane Dorian.

"On September 1, 2019, Hurricane Dorian struck Grand Bahama causing significant damage across the island. In January 2020, the Grand Bahama Port Authority approved the recovery of approximately $15m of restoration costs related to GB Power's self-insured assets.

"As of June 30, 2020, $14m of these costs were incurred, and recorded as a regulatory asset. Recovery of the regulatory asset, due to start on April 1, 2020, has been temporarily suspended as a result of the economic impacts of COVID-19 on Grand Bahama. This recovery is now expected to start on October 1, 2020."

Mr Laroda, though, urged Grand Bahama businesses and residents not to panic because, based on his discussions with Mr McGregor, the October 1 date was flexible and not set in stone. "They would have initially said it was August they were going to implement it after the first postponement, and then, of course, we have this situation that caused them to move it to October.

"They're maintaining that at some point they have to start recovering that money. I've spoken to the president and chief executive, Dave McGregor, and I feel they're trying their best to work with us. I think that when October comes, and a lot of people are not back to work - it's my understanding the Shipyard let go 65 people - if these things continue to happen on the island I'm sure we'll have discussions with them and it will be pushed off even further until next year. I'm not overly concerned."

GB Power's Storm Recovery and Stabilisation Charge was due to be added to all light bills from April 1, 2020, as "the fairest way for customers to pay" for the damage inflicted on its transmission and distribution network by Hurricane Dorian's category five winds.

Acknowledging that many GB Power customers were still facing "tough times" rebuilding businesses and lives shattered by Dorian, and that an increase in electricity costs will be the last thing they want, Mr McGregor said at the time it was introduced that the extra charge was "unfortunate" but necessary to rebuild essential energy infrastructure.

Pointing out that GB Power had delivered predictable energy costs through its fuel hedging initiative, and that tariffs had not increased for eight years, he added that such reliability "needs to be paid for" after the utility incurred almost $45m worth of uninsured restoration costs in four years when Hurricane Matthew's 2016 damage is factored in.

The Grand Bahama Port Authority (GBPA), the utility's regulator and Freeport's quasi-governmental authority, revealed the imminent addition of the extra charge to all GB Power bills.

The charge for its three customer categories was initially set at:

• Residential - $0.013 cents per kilowatt hour (kWh) or 1.3 cents

• Commercial - $0.008 per kWh or 0.8 cents

• GSL (industrials) - $0.010 per kWh or one cent

The GBPA added that the Storm Recovery and Stabilisation Charge would represent an increase of less than $7 per month for the "average" residential customer, and $24 for the "average" business customer, in a bid to soften the upcoming blow and any consumer push back/fall-out.

Mr McGregor said the extra charge is a "pass through" fee that GB Power will not make money from, much like the fuel charge. He added that the utility had also sought to minimise the impact on the commercial sector, and encourage the private sector's post-Dorian revival, with lower rates for such customers while also recognising their higher consumption volumes.

The GB Power chief also reiterated that the electricity supplier, and its GBPA regulator, had initially sought to address storm restoration costs through the creation of a self-insurance fund. However, Hurricane Matthew arrived before it could be created, and Dorian has further forced that strategy on to the back burner.

The extra consumer charge applies only to GB Power's transmission and distribution network. While its flood-damaged Peel Street plant and other generation assets were covered by insurance, utilities are unable to obtain such coverage for all their transmission networks as carriers typically shy away from the risks presented by hundreds of miles of exposed electrical lines and poles.