The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light (BPL) was last night urged by the Chamber of Commerce’s top executive to “do everything in its power” to solve its cooling woe and avoid a repeat of summer 2019’s blackouts.

Jeffrey Beckles, responding to Tribune Business revelations that the state-owned utility monopoly is locked in a race against time to have its new $95m generation plant ready to meet peak summer demand, warned that “in no circumstances” can households and businesses endure a return to daily load shedding that lasts for a minimum three hours.

Confirming that the chamber and wider private sector were “very concerned” about BPL’s latest mishap, Mr Beckles said it was vital that a cooling solution for the seven Wartsila engines was in place “urgently” given the lack of confidence both corporate and residential customers have in its ability to produce a reliable energy supply.

“Listen, in any circumstances we cannot have another repeat” of summer 2019, Mr Beckles told Tribune Business. “I think BPL really has to step up to the plate, not just with technical challenges, but they have to come up with solutions.

“How we got here is irrelevant. We need them to fix it soon as corporate and consumer confidence is critical, so we are concerned. We’ve just got to keep moving.”

Tribune Business exclusively revealed on Monday how BPL’s 132 megawatts (MW) of new generation capacity has literally “hit the rocks” after the state-owned utility encountered unanticipated difficulties with its preferred solution for cooling the Wartsila-manufactured engines.

BPL’s plan to dig four 800-feet deep wells to provide a water source has run into harder-than-expected coral rock structures that have proven difficult to penetrate, with multiple drill bits breaking. It has been forced to source and order a closed radiator system as a back-up in case the wells are not in place in time to meet peak summer demand.

Desmond Bannister, minister of works, told this newspaper that a cooling solution needs to be implemented by May so that all seven engines are fully operational by June to meet peak summer demand. This means BPL has somewhere between two-and-half and three-and-a-half months to prevent a repeat of the daily load shedding and blackouts that plagued New Providence last summer.

Mr Beckles was last night among those questioning how the cooling system situation had arisen, given that BPL had almost one year to plan and the extent of a $95m investment in purchasing, shipping and installing new engines critical to giving New Providence a more reliable, efficient and cheaper energy supply.

“Somebody needs to answer for it and get it fixed,” the Chamber chief executive added. “Historical stuff notwithstanding, this is where we are and we just need a solution. Keep in mind this is almost March. Spring is right around the corner, and we need to know the timelines and what to anticipate.

“BPL needs to do everything in its power to avoid a 2019 experience, and come up with a solution very quickly. We are very hopeful. We can only be hopeful.”

The Chamber of Commerce, in a separate statement, said the Bahamian private sector “needs to be confident” that BPL is capable and committed “to fulfilling their obligations regarding safe, consistent, reliable and cost-effective power supply”.

And, with the imminent introduction of an additional charge to all BPL customers’ bills to help pay for its $580m refinancing, the Chamber added that there was a “justifiable expectation” the utility will start to deliver reliable energy supply as its part of the bargain. The new debt servicing charge is expected to be equivalent to 15 percent of customers’ current consumption.

It said: “The stability and delivery of power generation are critical components to strengthening our economy. A reliable and long-term solution must to be found and shared with the wider community. We consistently refer to the impact our power challenges have on the private sector and investment environment.

“The private sector has experienced the loss of productivity and profitability last year through the extensive power outages and load shedding. Given the fact that, this year, both the private sector and residents are expected to pay more through the rate reduction bond (RRB), there is a justifiable expectation that power generation will be consistent.”

The Chamber added: “Ensuring proper technical resources and access to guidance is imperative to BPL delivering on the commitments it has made to the Bahamian public, and as it undertakes transformative change.

“Additionally, the BCCEC is concerned that as the solution to bringing the cooling water into the plant to cool the engines is found, that BPL also has an environmental plan for the disposal of the wastewater taking into account the necessary protocols needed to prevent any damage to the marine life in the area.

“We appreciate the minister’s acknowledgment of the challenges and his commitment to finding a solution. However, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) is calling on BPL to provide and announce a solution as a matter of urgency.”

Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that the cooling system woes were likely to exact a further toll on already “thin” public trust and confidence in BPL.

He added that the utility and all state-owned enterprises (SOEs) needed to become more transparent and open over any issues they were having so that the private sector and public could plan and adjust accordingly.

“Obviously there is concern from both the citizenry and the private sector because electricity is such a critical need for day-to-day quality of life and the cost and ease of doing business,” Mr Aubry said.

“The problems sounds like an engineering one. The public’s trust is a bit thin at this point. Any delay, and it may be a significant one, brings into question the viability of the investment in BPL and this new system. This is something we need to get as soon as possible so we can start to see the benefits and consistency folks want.”

He added: “It is important for BPL and all the SOEs to be open, transparent and clear so folks and businesses can be informed in whatever decisions they need to make. If someone is launching a new business, or new business model, that is dependent on a lower cost of electricity, that is essential.

“The more transparent, direct and open the information, the more citizens are involved with government and the better the outcomes the Government obtains.” Noting that Dr Donovan Moxey, BPL’s chairman, had been reluctant to discuss the cooling situation with Tribune Business, Mr Aubry said accurate details were critical to Bahamians’ ability to budget and meet their financial obligations.

“It’s not good to say: ‘We’ll tell you about it once we fix it’,” the ORG executive director added. “It’s better to say: ‘Here are the dilemmas we are going through, and this is how we’re approaching it’. I can understand their hesitancy given the importance of what this means and if it doesn’t work out.”