The Tribune

By YOURI KEMP

Tribune Business Reporter 

ykemp@tribunemedia.net

Bahamas Power & Light’s (BPL) chief executive yesterday said the utility could create $30m per year in savings when its proposed 60 Mega Watt (MW) solar project for New Providence becomes operational. 

Shevonn Cambridge said the facility will slash BPL’s fuel costs and result in “lower charges” for consumers. “The 60 MW project is anticipated to be a utility-scale facility, and that will feed into the overall grid for New Providence,” he explained. “And, basically, the benefits of it will be felt by all consumers, because what it does is the same 60 MW that we’re currently generating with conventional fossil fuel generation will now be fuel-free.

“Working simultaneously with that, a lot of people spoke to the supply chain challenges, which caused a lot of maintenance issues with the road works, the waterworks and the like. We’ve experienced the same thing in the energy sector. But now, as the supply chain channels are opening up, we’re ramping up our maintenance, which is going to allow us to produce power with more efficient forms of generation .

“We envision that that will also allow us... to produce more power on the cheaper fuels, and to actually have the alternative of switching between the various fuels that can be used depending on market prices.”  Mr Cambridge added that BPL may “go back out to tender” on fuel suppliers to test the market for the best prices. “All of these things are working in tandem to keep the price of production down and the final costs to the end user at a minimum,” he added.

Mr Cambridge also confirmed that BPL’s $535m Rate Reduction Bond refinancing, an initiative left behind by the former Minnis administration, has been “taken off of the table” for the time being. However, he did note that the utility is “still looking at the possibility of the bond market and the opportunities that are available”. 

Current global capital market conditions, dominated by rising interest rates, mean conditions are presently unfavourable for BPL to raise financing via the bond because it would have to pay investors a higher interest coupon. That, in turn, would mean higher electricity bills for BPL’s household and business consumers. 

Mr Cambridge added: “What I can tell you is that things really changed during the pandemic. That would have changed the market’s appetite for a rate reduction bond by another structure.” BPL is now looking at the “best way” to raise capital and address its $300m-plus legacy debt, but it is not looking to raise capital on the international markets at this time. 

BPL is also averaging over 1,400 disconnections a month, but most of these are quickly turned around for reconnection. Mr Cambridge said: “I was asked this question by a reporter a few weeks ago, and the answer was somewhere on average we have about 1,400 to 1,500 disconnections per month. But like I said, it’s a rolling cycle. We disconnect you today and you come in tomorrow, you pay. So at any given point in time, there’s maybe 1,000 people who are disconnected.”

Alfred Sears KC, minister of works and utilities, added: “Consistent with the Government’s policy to incorporate renewable energy sources in the power generation, the Government has approved the construction of a 60 MW solar plant to be constructed in New Providence. This project approved by the NEC (National Economic Council) is well in the design stage and in consultation with the Ministry of Works, the developer and also in consultation with BPL as well as with URCA.

“Further, the Government has borrowed from the IDB $80m for the reconstruction of critical energy infrastructure and restoration of electricity services in islands heavily affected by Hurricane Dorian, while facilitating the integration of renewable energy and various Family Islands.

“And in addition to the $80m from the IDB, the European Union (EU) has also granted $7m as a grant to support this initiative of the Government. This initiative will involve the installation of solar grids in Acklins, Crooked Island, Inagua, Mayaguana and Long Cay as well as Abaco and east Grand Bahama.”