The Tribune

By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

FNM leader Michael Pintard yesterday denied that Shell North America was sidelined during the selection process for new engines at Bahamas Power and Light (BPL) under the last administration.

The Opposition leader was responding to questions tabled by Minister of Energy and Transport JoBeth Coleby Davis during the last session of the House of Assembly regarding BPL’s contract to replace Station C after a fire and if the contract was “favourable” to the country.

While giving his contribution on the Consumer Protection Bill, Mr Pintard said Shell North America was a part of the selection process for the Wartsila engines as they were meant to be a part of the asset portfolio for a new power generation entity.

He said: “The discussion that was delivered previously made mention that Shell North America was sidelined after the fire. It’s not true … and in fact, Shell North America was a part of the process in the selection of the engines for station A and ultimately was a part of the process in selecting Wartsila.

“The reason why Shell North America was a part of the process in selecting was Wartsila was because BPL intended to have these new engines transferred to the new power generation entity Power Co in which Shell North America would have a majority stake and BPL would have a minority stake.

“It was important that Shell North America saw the engines as a part of its long-term power generation strategy as a part of the power purchase agreement that was being negotiated with BPL and Shell North America.”

Earlier this week, Ms Coleby questioned why BPL did not contract rental generation to replace Station C after the fire and why the generators were placed in a structure that could not adequately facilitate them.

She said: “What prevented BPL from conducting a competitive process to contract rental generation to replace Station C after the fire in 2018?

“Do we consider the terms to be favourable to The Bahamas and in line with industry standards?

“Why was the contract amended to add more generators in a building acknowledged at the time of the decision as structurally incapable of bearing such weight?”

Mr Pintard said that the Minnis administration did not secure rental generation as the costs would have cut into the resources needed to purchase generation assets for the utility’s balance sheet.

He said that at the time it was predicted that generational assets at the Blue Hills plant would make up the shortfall at Clifton Pier but they were lost unexpectedly leading to load shedding in the summer of 2019.

He said: “BPL made the decision not to secure rental generation after the fire because this would have created a significant cost centre for BPL and would have taken away financial resources that could be applied to the purchase of generation assets to be part of the company’s balance sheet.

“At the time, BPL numbers had generation assets undergoing maintenance at Blue Hills power plant that could make up to 60MW shortfall that we were experiencing at Clifton Pier.

“Unfortunately, after coming off winter maintenance in spring of 2019 BPL unexpectedly lost to large generational assets at the Blue Hill plant and was not able to secure the additional rental generation for the summer of 2019. And that is what led to the load shedding in 2019.

He added that the Wartsila engines are tri-fuel, but they were not outfitted with nozzles for LNG as the fuel source was not anticipated for at least three years and if installed at that time they would become contaminated and money would have been wasted replacing them.

He said: “The Wartsila engines are tri fuel and the engines could operate on LNG, heavy fuel and ADO. The engines were installed and are gas capable. The nozzles were not, this is the point, that nozzles were not installed to make the engines gas ready because LNG was not planned or anticipated as a fuel source for at least three years.

“If the engines were made ready gas ready from day one, meaning the equipment had the capacity, but was not made gas ready, what you would have had is our investment would have been wasted because after three years without LNG as a fuel source the nozzles would have been contaminated by the liquid fuels. That is why the nozzles were not installed, although the system was able. The engines would have been made gas ready only when the LNG fuel source is available.”

He said the Wartsila engines were negotiated at a “significant discounted rate” and Shell North America had agreed to purchase all engines as part of the new utility that was to be formed.

He said: “BPL made the decision to add three additional engines for a total of seven, it was determined that was that the seven engines fit into Station A, and the cost for the engines were negotiated at a significant discounted rate. Shell North America had agreed in principle to purchase all engines as part of the Power Co entity to be formed.”