The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Activists yesterday blasted the addition of a Dorian restoration charge to all Grand Bahama residents' electricity bills as showing "complete disregard and great insensitivity" for the island's plight.

Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC), told Tribune Business that storm-battered consumers and businesses "cannot bear" the additional levy that Grand Bahama Power Company has described as essential to recovering $15.6m worth of post-Dorian infrastructure repairs.

The utility monopoly reiterated yesterday that the Storm Recovery and Stabilisation Charge will only increase consumer bills by an average one cent ($0.01) per kilowatt hour, but Pastor Victor said this would be of little comfort to residents given that energy costs were already high prior to Dorian.

Given that Grand Bahama residents and businesses did not own the transmission and distribution (T&D) infrastructure whose rebuilding will be financed by new charge, he argued that GB Power and its 100 percent owner, Canadian utility giant, Emera, should instead take responsibility for funding the repairs - particularly given the latter's deep pockets.

Pastor Victor also slammed the seeming rush to introduce the new charge, which will be added to all Grand Bahama consumers' bills from April 1, without undertaking a full public consultation exercise to obtain feedback from residents and the private sector on the likely impact.

He added that the episode further highlighted the need for the Utilities Regulation and Competition Authority (URCA) to take over supervision of GB Power and all other Freeport-based utilities from the Grand Bahama Port Authority (GBPA), along with the introduction of energy sector competition - especially in the island's west and east, and outside the Port area.

"It is absolutely - I don't know if I should use the word unconscionable - for an increase to be put on an island still recovering, and which will probably be recovering for several years," Pastor Victor told this newspaper of GB Power's action, which has been approved by the GBPA as its regulator.

"It just shows great insensitivity to the economic situation in Grand Bahama. We're, the coalition, totally against it. There should have been a way to deal with this apart from increasing customer bills. Those bills are already high, and now they're going to put an increase on the population? It is completely not right.

"I can safely say the population of Grand Bahama is against it. Even as a pastor, I work with a network of 140 pastors on this island, and they're all totally against it. It just brings to bear the need for an independent regulator, such as URCA, to be active on the island."

Dave McGregor, GB Power's chief executive, admitted in an interview with Tribune Business that the additional consumer charge would "not be an easy sell" amid the slow post-Dorian recovery but argued that it was "the fairest way for customers to pay" for the damage inflicted upon its uninsured transmission and distribution network.

He explained that the new levy will act as a pass through, much like the fuel charge, and that GB Power will not earn one cent in profit from it. This, Mr McGregor, would not be the case if the fee was incorporated in GB Power's existing tariff structure, as it would add to the utility's bottom line in years when no hurricane occurs.

Explaining that the fee had been calculated to spread the $15.6m Dorian cost recovery over five years, thereby minimising the rate impact for Grand Bahama residents and businesses, Mr McGregor said the reliability and price predictability that GB Power has created since 2013 "needs to be paid for" - especially when the $27.5m repairs from Hurricane Matthew are factored in.

Pastor Victor, though, yesterday questioned why GB Power was seemingly in such a rush to introduce the levy just seven months after Dorian hit the island. He also queried why it had not given customers more advanced warning and a full explanation.

"It shows complete disregard for the economic condition on the island," he slammed. "The other side of this is that they're saying the cost of living is going to increase further on the island. We already have a high cost of living on this island, and they're increasing it more.

"Our position is that no increase is what is needed because the island cannot bear it now. You're going to bring what you say is a modest increase when we cannot bear the prices as they are now."

Pastor Victor added that he was personally without power for three weeks last September post-Dorian. Yet he said his bill for that month was "higher than for other months" after GB Power estimated consumption. Arguing that "this makes no sense", the Coalition chief said Emera and GB Power - rather than their customers - should be responsible for financing the repairs.

"We're totally against any increase. Period. The economy cannot bear it, the people cannot bear it," Pastor Victor said. "The owner needs to bear the cost. The T&D infrastructure is not owned by the public; it is owned by a private corporation that is not Bahamian.

"It's a foreign company that owns the infrastructure on our island. Therefore they are providing a service and are responsible for their equipment. To say we must foot the bill for repairs should mean we own the infrastructure but we don't. As a private company they should absorb all the expenses to ensure their infrastructure holds up."

Pastor Victor said the current situation could be traced back to the early to mid-1990s, when the GBPA's late owners, Sir Jack Hayward and Edward St George, were permitted to split the energy utility away from Freeport's quasi-governmental authority.

This enabled the duo, and their heirs, to sell their ownership stakes in what today is GB Power for multi-million dollar profits. Majority ownership and management control has subsequently passed to Southern Energy (Mirant), the short-lived Marubeni/Taqa consortium and now to Emera, which has bought out all remaining Bahamian shareholders.

While some of the latter have traded their holdings for shares in Emera, Pastor Victor said this had changed GB Power from a "municipality" focused company, concerned primarily for the interests of its customers, to one that was now shareholder and profit driven.

"We need a municipality model because we are dealing with a city that has been through the most destructive hurricane in the history of the Commonwealth of The Bahamas," he said, adding that the situation further exposed the need for the Coalition to keep pushing on two causes dear to its heart.

"We need to have competition on this island when it comes to power generation, especially in the east and west, and we must have URCA regulating GB Power," Pastor Victor continued. "The present regulatory regime is not working in the interests of people on the island. There has to be some protection for utility company consumers. URCA is the best choice we have."

Acknowledging that permitting URCA to regulate Freeport-based utilities may conflict with provisions of the Hawksbill Creek Agreement, he suggested that a similar body operating "in conjunction" with the Nassau-based regulator be set up if such concerns proved overwhelming.

Other Freeport-based residents and businesses, speaking on condition of anonymity, seemed more resigned to their fate. One said of GB Power's new fee: "It's ridiculous really, but what are you going to do? The whole Freeport thing is coming to a grinding halt."

Another added: "I suppose it had to come, but no one can afford the bill as it is now. That's the problem. Emera have done a good job except on the bills. I suppose they'd better do it because if another hurricane comes the cannot spend that money again."

The storm levy for GB Power's three customer categories will be:

• 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 this will 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. The charge will appear as a separate line item on customer bills to provide complete transparency on their electricity bills.

"We have received the go-ahead from the GBPA to recover the costs of Hurricane Dorian restoration through the Storm Recovery and Stabilisation charge," Mr McGregor confirmed. "On average, the impact of the charge is one cent per kilowatt hour.

"For residential customers, the rate is 1.3 cents per kilowatt hour. For commercials, it's point eight of a cent and, for industrials, the rate is one cent per kilowatt hour. It's important to understand that, because the charge is tied to consumption and not a flat rate, customers can impact the charge - and their overall bill - through prudent energy use."

He added: "In most regions, including the Caribbean, insurance is not available for transmission and distribution networks, so costs to repair hurricane damage cannot be recouped in that way.

"We know we're not the only ones rebuilding. It's a challenging time for so many, and we continue to work with customers to help them manage their electricity costs. Building back quickly and efficiently after an event like Dorian is critical to the health of the island's economy and is important to our customers, and we remain fully committed to Grand Bahama's recovery."

Nikita Mullings, GB Power's director of customer operations, said: "We know that we still have work ahead of us to complete restoration to all Grand Bahama communities.

"With the help of contract crews and equipment, our hard-working team is rebuilding 35 miles of transmission line to east Grand Bahama and restoring service to East End communities. We are working efficiently and safely, and estimate that full restoration of Grand Bahama will be achieved by May 2020."