Fuel charge to stay same after review, says BPL

Bahamas Power and Light headquarters.

As of Thursday, July 1, 2021

BAHAMAS Power and Light said yesterday that after a mandated 12-month review, the fuel charge for BPL customers will remain at about 10.5 cents per kilowatt hour through June 2022.

BPL said this new low fuel charge was first secured in July 2020, when it executed the first ever fuel hedge transaction in company history.

“On July 9 2020 BPL executed its first ever fuel hedge, which set the fuel charge at about 10.5 c/kWh from July 2020 through June 2022, subject to review after 12 months. That review has just been completed and the continuation of the rate was confirmed,” BPL said.

“BPL reiterates that fuel is a pass-through cost, therefore there is no savings to the company due to the lower fuel charge: all savings go to the customers. And in fact, average residential customer bills are down by 24 percent versus June 2018.

“The average residential customer saved $42 on the fuel charge in June 2021 versus June 2018 (prior to the hedge). That extrapolates to an annual savings on the fuel charge of about $500. More broadly, the research shows that from August of 2020 to June 2021, customers and the public treasury have saved $15 million as a result of the hedge programme.”

BPL said that if the current trend continues, the company can project savings of about $40 million to customers and public treasury from August 2020 to January 2022.

“This is especially important given the recent spike in oil prices, which places upward pressure on the fuel charge: the BPL fuel hedging programme allowed BPL to hold the fuel charge to 10.5 cents for the next 12 months,” BPL said.