The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light (BPL) has given the go-ahead for the resort industry to “explore” cost-cutting renewable energy options although the details remain to be agreed, a top hotelier said yesterday.

Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, speaking after he and industry executives met with BPL’s top management said the state-owned utility’s approach represented “a welcome change” given that energy costs continue to act as a drag on the sector’s profits.

“I can tell you that we discussed the whole issue of renewables for all of the customers, and the large customers, and it was agreed that BPL will welcome the large customers to offset a portion of their position with energy from some renewable form,” he told Tribune Business. “That will be a welcome opportunity for some of the large properties, medium or small properties to consider alternative forms of electricity.”

While details, such as how much of a large hotel’s energy will be generated from renewable sources, remain to be worked out, Mr Sands added: “Certainly the position of us not being able to do it at all did not come up. To what level has to be discussed, because there are questions of redundancy and other issues.

“This is an ongoing discussion to be had. The principal position is they [BPL] have no difficulty with hotels exploring the option. That creates an opportunity for us to pursue what is in the best interests of the properties to reduce energy costs but also contribute to the environment in terms of cleaner energy and being a responsible corporate citizen.”

BPL’s position came after Tribune Business last week revealed how the utility’s former chief executive, Whitney Heastie, warned that it cannot afford for Atlantis and Baha Mar to convert entirely to renewable energy because it would lose 15 percent of its revenues.

He wrote in an October 2021 letter to Alfred Sears, minister of works and utilities: “To sustain monthly expenditures, BPL requires large commercials to remain on the grid, as their financial support is critical to supporting the revenue flow that the other rate classes on their own could not support. Today, the largest two commercials (Atlantis and Baha Mar) provide some 15 percent of BPL’s total revenue.

“The removal of these large commercials’ generating load to renewables would have to be backfilled with financial support from elsewhere as, while generating loads would reduce, BPL’s base cost would remain unchanged. Hence it is important for BPL to be strategic in meeting the renewables goals of the country while ensuring its own financial viability.”

Yesterday’s meeting between BPL and the hotel industry came as the latter seeks ways to mitigate the impact from next year’s fuel charge hike that will peak with a 163 percent increase between June 1 and August 31 at the height of peak summer air conditioning consumption.

“Both sides presented their case and their issues,” added Mr Sands. “There were a number of industry ‘asks’ of BPL, and we want to give them an opportunity to review and consider our position. They’ve agreed to get back to us. We want to keep them [the tourism industry’s requests] under wraps for a short period of time while they review and assess, and get back to us.”

The BHTA, in a statement, said it “sought to provide recommendations to BPL for ways to potentially mitigate the effect of the increases as businesses, many still in post-COVID recovery mode, will encounter significant financial challenges if they must face an increase to the second-highest expense item alongside other looming increases to the cost of doing business in The Bahamas in the immediate future”.

In response, BPL executives gave a presentation outlining the utility’s short, medium and long-term plans to address the rising cost of power, plus strategies to address power disruptions and improve network reliability in both New Providence and The Family Islands.

“The BHTA sought to understand BPL’s plans to accelerate, in a meaningful manner, a move to alternative energy sources, as well as how the industry partners could work collaboratively to eliminate barriers to entry for consumers who want to migrate to self-generating renewable energy options such as solar power,” the Association added.

“The BHTA put forth a number of ‘industry asks’ for consideration to help mitigate the financial fall-out of the heightened fuel surcharge...... We look forward to working together to realise the potential for alternative forms of effective, cost efficient, environmentally-friendly power production in the foreseeable future, [and] to achieve the much-anticipated, long-awaited holistic transformation of energy production and supply in The Bahamas.”

BPL, in its statement, praised the resort industry for being “typically dutiful in keeping accounts current and properties, particularly in the Family Islands, lend to profitability of our operations”. It added: “The BPL executives communicated the current position of the company, while providing an overview of the operational goals and objectives for the short, medium and long-term.

“The present options for customer self-generation using renewable sources, conservation of energy and opportunities to reduce consumption and cost were laid out by BPL to the members of the BHTA present. BPL also spoke to the BHTA representatives about current and impending challenges and opportunities in the energy sector.”