The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Activists yesterday pledged to keep fighting Grand Bahama Power Company's bid to recover $15.6m in Dorian restoration costs from customers even though it has been delayed a further three months.

Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC), a long-time GB Power critic, told Tribune Business that confirmation the island's utility monopoly has pushed the start of its Storm Recovery and Stabilisation charge back from October 1 to New Year's Day 2021 was "the best news I've had today".

He quickly promised, though, that himself and other opponents of this additional charge being added to customer bills will not let their guard down as the issue remains "a major concern" for all players in a Grand Bahama economy that has been devastated by the twin impacts of Hurricane Dorian and COVID-19.

The Power Company's regulator, the Grand Bahama Port Authority (GBPA), confirmed in a statement late yesterday that the new charge's introduction was being pushed back by three months to January 1, 2021, in an effort to "balance the need for a healthy electric utility with upgraded technology and infrastructure" against the "unprecedented" blow delivered to businesses and households.

"I figured it was only going to be for a few months," Pastor Victor said of the delay. "That's all it is. It's still going to be bad timing. The economy has to recover, and if you look at it that's [January 1] considered the tourist high season.

"Because of the COVID-19 shutdown we may not have the high tourist season come in, and we're not sure when the cruise ships are going to sail again. There's a lot of uncharted waters. We don't know what the fall-out is going to be."

Arguing that Grand Bahama's fragile economy cannot bear the burden of any across-the board cost increases at this time, no matter how small, Pastor Victor said that while the Coalition and other activists welcomed the proposed charge's delayed imposition "we're certainly going to continue opposing it. Period. We don't believe the customer should absorb that."

Grand Bahama Power and the GBPA have consistently argued that the new charge, which will be a separate line item in customer bills, 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 for the 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 utility also said the monthly amount paid by customers will depend on consumption, but Pastor Victor said no matter how small the increase in energy costs they would combine to worsen the impact of what he said were increased food costs, high unemployment and reduced incomes.

"Any increase is too much," he told Tribune Business, " and I feel that very strongly because of the other cost factors the economy faces. You may think it is a small charge, but someone on the other side of the fence is charging me something else.

"The consumer is paying increased costs across the board. It may seem small to you, but I have another increase down there. When you put that collectively together any increase is too much; that's the reality on the ground."

Pointing to long lines at Grand Bahama-based money transfer businesses of persons receiving incoming payments from friends and relatives, Pastor Victor added he believed the Power Company had "got the message" that implementing its new charge now "doesn't make any sense and shows insensitivity" to its customers' plight in an economy "being kept afloat" by the Government and non-profit groups.

However, he acknowledged that pressure from both the Government and regulators was what likely carried the day. "The Coalition did have a meeting with the regulator [the GBPA] to stress our concerns that this charge needs to be deferred, and their response was that they agreed it should be deferred. We left the meeting with that understanding.

"The Government's position was that the charge should not be levied on Grand Bahama at this time. They were very much against the charge being levied on the population." Pastor Victor said the Coalition had met with Senator Kwasi Thompson, minister of state for Grand Bahama, to discuss the matter.

The GBPA, in a statement, said the regulatory framework agreed with the Power Company allows the latter to recover its non-insured storm restoration costs via a levy spread over a five-year period.

“The Storm Recovery and Stabilisation charge, which allows the utility to recoup costs associated with storm restoration deemed reasonable by the GBPA, was initially approved for implementation on April 1, 2020,” said Karla McIntosh, the GBPA's general legal counsel.

“However, with the onset of COVID-19 and two subsequent country-wide lockdowns, the charge was initially delayed to August 1, and then further to October 1, to help support residents during this challenging period.”

She added: "We understand that GB Power is allowed to recover reasonable restoration costs associated with significant weather events. Since the onset of COVID-19, we have been in consultation with the utility over the proposed timing for implementation of the storm charge, resulting in successive deferrals.

"Given the present state of the economy and the unexpected second wave and restrictive lockdowns, it is our regulatory obligation to consider the best interests of customers. We have worked with GB Power to further delay recovery of the $15.6m costs for Hurricane Dorian until January 1, 2021.”

GB Power, in its own statement, said the Storm Recovery and Stabilisation charge was standard global electricity practice for recovering costs associated with post-hurricane restoration. Pointing out that no insurer will cover transmission and distribution (T&D) infrastructure in a hurricane belt, it added that a separate line item on bills was the fairest way to achieve this as it would prevent the utility from earning a profit on the recovery fee in non-storm years.

"As a responsible business, we insure all that are insurable ‐ our buildings, plants, vehicles and substations. But, as with all electric utilities in our region and far beyond, transmission and distribution infrastructure – the poles and wires that bring power to your home or business – are not insurable," GB Power said.

"Recouping actual costs for restoration of these assets through a storm recovery charge or similar is common among power companies throughout the world. Through prudent operational cost management and strategic fuel purchase strategies, we were able to delay implementation of the charge following restoration from Hurricane Matthew.

"And we continue to practice these important cost saving initiatives today. But, following Dorian’s $15.6m restoration, those measures alone are not enough to enable us to recover those uninsurable storm costs without the implementation of the charge."

GB Power then added: "Recouping storm costs enables us to be a healthy utility, delivering on our customers’ needs across the island every hour of every day, and quickly and safely following significant weather events such as Hurricanes Matthew and Dorian.

"While the charge must be implemented, after careful consideration and consultation with key stakeholders, we have decided to further delay the implementation of the charge and not implement on October 1 as previously communicated."