The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

GRAND Bahama Power Company’s (GBPC) impending fuel charge increase was yesterday branded “disgraceful” by one businessman although the move came as little surprise.

Greg Langstaff, Grand Bahama Brewing Company’s proprietor, told Tribune Business that the increase which customers will see reflected in their bills from November 1 comes as the price on many consumer products has already increased by at least 40 percent.

“It’s a real shame,” he added of the 15 percent increase, which is taking GB Power’s fuel charge from the present 10 cents per kilowatt hour to 11.5 cents. “I haven’t seen too many companies or businesses announce they are going to increase their employees’ wages at the same rate, but I guess this minimum wage increase will address some of that because a lot of people here are paying people at the minimum wage.”

Brent Collins, Freeport-based Power Equipment’s chief executive, said he had been expecting a fuel charge increase for several months. “We’re encouraging people to go solar now for the same reason. Everybody knew this was going to happen; they just didn’t know what the amount was going to be,” he added.

“We had a lot of customers asking us for solar and battery options. So I’ve been doing that type of work over the last four to six months because, honestly, I don’t see how The Bahamas can really make it unless you unless you do that. As long as you have solar power to your house, you won’t have to worry about GB Power’s bills. That’s what they are really pushing people to do now.”

Asserting that renewable energy is the only mechanism available to Bahamians moving forward, Mr Collins said: “I’ve been in the solar business since 2012, but back then it was a little more expensive to do. Tons of people already had it in place.

“When I got into solar, it was through my personal experience in 2012, but I understood that there were several homes on the island that already had solar panels and it has increased over the years. Right now, my personal IT clients are asking for solar options, and this is how I fell back into it because I have a lot of friends and family asking me about it, and the reasoning they have is they knew the rates were going up.”

GB Power was earlier this year permitted an average base rate increase of 3.3 percent, which was 53 percent less than the 6.3 percent rise originally sought. The move united both the private sector and community activists in opposition on the basis that any jump was “too much” for a battered economy struggling to revive from COVID and Hurricane Dorian.

Still, GB Power’s fuel costs will be close to half, or 50 percent less, than BPL’s for the nine-month period between March and November 2022 based on what the latter unveiled recently. BPL’s fuel charge will hit 23.3 cents per kWh for the three months from March 1 to end-May 2022; 27 cents for the June to end-August period; and 25 cents for September to end- November 2022.

These compare to the 12-14 cents per kWh charge that GB Power estimates it will have to levy on customers throughout 2023 after it managed to lock-in 80 percent of its fuel needs for 2023 at $51 per barrel via its continuing hedging strategy.

Explaining that higher global oil prices have forced the fuel charge increase from 10 cents to 11.5 cents per kWh from November 1, 2022, Nikita Mullings, GB Power’s chief operating officer, said in a statement: “With GB Power’s fuel purchase strategy, or fuel hedging programme, we have been able to protect customers from global price volatility as the cost of oil has risen this year...

“We know there is never a good time for a rise in costs, and these are particularly difficult times for many Grand Bahamians. Without hedging, fuel costs would be at about 18 cents per kWh. For 2023 we’ve managed to hedge our fuel costs at less than $51 a barrel.

“Based on current market trends, the fuel charge for 2023 should range between 12 to 14 cents per kWh. It’s clear our fuel strategy continues to benefit customers despite the unprecedented rise in global oil prices. With the continued price volatility, we will be communicating regularly with customers on fuel costs. Beginning in November and every month thereafter, we will be advising customers of the fuel cost monthly.”

GB Power said that with the November 1 increase, a residential customer consuming 350 kWh per month will see the fuel portion of their bill rise by approximately $5. It added that fuel costs are a direct pass-through to customers, and the company does not benefit in any way from the fuel charge.

“We want to encourage customers to be mindful of energy use and to consider adopting habits such as limiting air conditioning use, turning lights out and lowering hot water consumption to help manage monthly electricity costs,” added Mrs Mullings. “At the end of the month, every effort to conserve is meaningful.”