The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Opposition's leader is arguing the Government's failure to build on the Bahamas Power & Light (BPL) reform strategy that it left in place is likely responsible for the utility's renewed resumption of load shedding.

Michael Pintard told Tribune Business that, when the Minnis administration was voted out of office in September 2021, BPL's New Providence generation capacity of 326 Mega Watts (MW) was well in excess of the island's peak 270 MW summer demand.

As a result, he argued that BPL had sufficient generation headroom to eliminate summer load shedding even if several engines had broken down or were offline for maintenance. However, load shedding outages returned last month, and Alfred Sears KC, minister of works and utilities with responsibility for BPL, and Shevonn Cambridge, BPL’s chief executive, last week conceded this may "possibly" continue until mid-July.

Mr Pintard, though, said the 132 MW of generation capacity that the former Minnis administration acquired from Wartsila was designed to put an end to load shedding by BPL. “In August of 2021, there was roughly around 326 MW of available generation, which would have met our needs," he said

"That was a combination of the newly-built station and what was already in the inventory; around 270 MW that BPL was already generating. This was not a band-aid as the minister would have suggested. Then, of course, we were renting somewhere around 56 MW, which was a combination of Aggreko as well as Sun Oil, so in terms of what he met in place, the reality was that there was no load shedding.”

Several observers have questioned whether BPL has had the necessary financing, and cash flow, to conduct regularly scheduled maintenance on its generation assets to ensure they remain in good condition and fully functional. Mr Cambridge last week conceded that the utility's budget does not provide for maintenance of its generation engines but there is a plan to tackle this.

Asserting that BPL has sufficient financial resources to undertake essential maintenance of its engines, and keep them in good working order, he nevertheless admitted there are challenges in this area. BPL’s cooling system is due to be “changed out" and replaced with a more efficient version, and Mr Cambridge added: “It's not in this year's budget, but it is in our plan moving forward in terms of prioritisation.”

And, while BPL has regular schedule for maintenance and follows the “manufacturer's recommended maintenance" practices, the continuing supply chain disruption caused by COVID-19 has caused delays in obtaining the necessary parts to service the engines.

“What I can tell you is that for this maintenance season, we just have about two more units that are currently underway and we expect those back by the end of July. So as far as subscribing to the prescribed maintenance schedules, we do that. But again, these engines are up in age and so the reliability tends to go down as the units get older, regardless of carrying out the maintenance."

Mr Cambridge also late last year confirmed that Wartsila’s contract to operate the 132 MW of generation capacity at the Clifton Pier power station, and provide routine maintenance, was not being renewed after it expired at year-end. BPL instead took these responsibilities back in-house, with Clifton Pier’s Station A “integrated” back into its own generation operations.

Mr Pintard, in a statement yesterday, queried if this had led to maintenance issues and if these were behind the recent load shedding. "We now understand that two of the seven Wartsila engines have been lost for the summer since the departure of Wartsila," he added.

"How can it be that since the start-up of Station A, with Wartsila responsible for full operation and maintenance, that BPL was able to successfully benefit from this station's power production.... However, within less than six months of Wartsila being released two engines have been lost. Is there a correlation?"

Mr Pintard also argued that the Davis administration made a mistake by failing to execute BPL's $535m Rate Reduction Bond (RRB) refinancing, plus the power plant and liquefied natural gas (LNG) regasification deal with Shell North America that was designed to outsource New Providence's baseload generation.

Mr Pintard said: “The Government met a strategy in place, and the strategy was presented to them by the former board of BPL led by Dr Donovan Moxey. They can disagree with it, they can tweak it if they want to, but what they cannot say is that they didn’t meet a strategy in place to take BPL forward."

He added in a subsequent statement: "The FNM had positioned BPL to eliminate its legacy debt and inject $200m into the company's capital budget through the $535m Rate Reduction Bond (RRB) offering. BPL would have been able to address infrastructural deficiencies, retrain and align its human resources and implement renewable energy initiatives utilising the $200m obtained through the RRB.

"It is regrettable that we did not complete this process before the 2021 general election. Similarly, the Davis-Cooper team failed to execute it once advised, although interest rates were still attractive at that time.... Under the FNM's plan, BPL's personnel would have undergone comprehensive training and upskilling to assume new generation, transmission and operational roles, resulting in a more efficient company.

"The objective was to proactively manage headcount and achieve profitability within 36 months of the RRB funding's completion It is evident that the promises made by the current administration have not materialised, leading to a setback in the progress made by BPL."

Mr Pintard also returned to the attack over the Government's failure to execute the trades underpinning BPL's fuel hedging initiative, which he added has resulted in consumers using 800 kilowatt hours (kWh) per month or more facing a 163 percent increase in their fuel charge during the June-August period. This also led to the Government providing BPL with a $110m loan to address its fuel arrears.

"Under the FNM's leadership, electricity fuel charges were successfully reduced and stabilised at 10.5 cents per kWh through BPL's innovative hedging strategy. This marked an historic achievement for the company, as it was the first time financial hedging had been utilised to benefit consumers by lowering and stabilising fuel charges," the FNM leader said.

"Moreover, the overall 'all-in' average electricity costs witnessed a significant decrease from approximately 32 cents per kWh in 2019 to a record low of 23 cents per kWh in 2020. This placed The Bahamas as the third-lowest in the Caribbean in terms of electricity costs."