The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

FNM leader Michael Pintard said Bahamas Power and Light (BPL) is now charging consumers “against the law” after government botched the fuel hedging strategy left in place by previous administration.

In a release to the media, Mr Pintard said: “The Utilities Regulation and Competition Authority (URCA) issued a press statement on December 15, 2022, where it stated unequivocally that after a comprehensive review of the recent BPL fuel charge increase and billing tiers, it was satisfied that BPL made an ‘adequate’ case for the rate increase of as much as 163 percent for some consumers over the next 13 months as per its billing tiers. However, if one were to look at the June 2020 amendment to the Electricity Act with respect to how the fuel charge is to be calculated and passed onto consumers, there seems to be a ‘disconnect’ between what is allowed by law and what BPL has been allowed to do by URCA, a statutory body that is in place to protect consumers.

“In accordance with the June 2020 amendment to the Electricity Act, fuel charge is to be calculated as a per kilowatt hour cost on a monthly basis, and this cost passed on to each consumer at the same price with the consumer billed at this single calculated rate in accordance with how much electricity they consumed within that specific month.

“Additionally, when the fuel hedging programme was put in place in July 2020, BPL was allowed to charge consumers a flat fuel rate for up to 12 months, keeping track of the actual cost of fuel in an “over-under” recovery account, and was required to adjust the fuel rate during the 12-month period if the actual price of fuel was +/- 5 percent of the flat fuel fee that was being charged to customers. In examining what happened to the fuel charged when the Davis administration failed to conduct the requested fuel hedge transaction in October 2021, and the resulting press release from BPL in February 2022 to increase the fuel charge by more than 30 percent, the Davis administration made a decision to ‘subsidize’ the fuel costs to the tune of millions of dollars per month, possibly circumventing the law at that time.

The current administration led by Prime Minister Philip “Brave” Davis decided to scrap the fuel hedging strategy left in place by the former FNM administration of Dr Hubert Minnis, which would have reduced the cost of electricity for consumers over the next three years. Instead, the Davis administration decided to increase rates on consumers in October, citing BPL’s inability to meet the demand and pay off its bill simultaneously.

Plans to raise customers’ fuel charges were initially announced by BPL in late February last year but the company later recalled the statement with government officials calling the announcement premature and ultimately denying the company approval for the increase.

Mr Pintard also said: “Now BPL has decided to bill customers differently for fuel costs based on their electricity consumption levels, but there is no provision in the amendment to the electricity act to support this. URCA needs to provide details on how BPL determined the different levels of billing for fuel to their customers, and how they came to a conclusion that BPL is in compliance with the law.

“The Bahamas is a country of laws and as such consumers have the right to take matters to court should they conclude that they are not being treated fairly under the law. Has URCA considered the possibility of a class action lawsuit brought against URCA and BPL by consumers, especially small, medium, and large business who are bearing the bulk of the 163 percent increase in fuel costs which could lead to as much as a doubling of their overall electricity bills next summer

“The June 2020 amendment to the electricity act was set forth to allow for the billing of all consumers equally depending on their total consumption, rather than billing them differently with tiered pricing according their consumption levels. URCA needs to come clean to BPL consumers by making public their comprehensive assessment of the price increases, and explain why BPL’s new tiered fuel billing policy is in compliance with the law.”