The Tribune

• ‘Grasps the nettle’ over Freeport regulatory authority

• ‘Everybody eager’ to solve long-standing vexing woe

• GB Power critic: ‘We must line up with The Bahmas'

By NEIL HARTNELL 

Tribune Business Editor 

nhartnell@tribunemedia.net

THE Utilities Regulation and Competition Authority (URCA) has put its battle with the Grand Bahama Port Authority (GBPA) over who has the authority to regulate Freeport’s energy sector before the Supreme Court.

Tribune Business can reveal URCA has filed a legal action, seeking to resolve this long-standing vexing dispute, following the two sides’ much-publicised summer exchanges sparked by the GBPA’s decision to proceed with reviewing Grand Bahama Power Company’s three-year tariff application that includes a 6.3 percent base rate hike.

The legal action’s filing, though, has never been publicly disclosed until now. All parties involved were tight-lipped on the move when contacted yesterday, with Juan McCartney, URCA’s corporate and consumer relations manager, declining to comment. Fred Smith KC, the Callenders & Co attorney and partner, who is the GBPA’s legal representative in the case, could not be reached for comment.

However, well-placed sources described the case as “sensitive”. While some observers suggested URCA has likely sought an injunction to prevent the GBPA proceeding with its review of GB Power’s rate proposal, Tribune Business has confirmed this is not the case and, instead, it is simply asking the Supreme Court to determine whether itself or Freeport’s quasi-governmental body has the authority to regulate the city’s utilities.

One contact, speaking on condition of anonymity, told this newspaper: “URCA has started a brand new action against the Port Authority. It’s the whole issue about whether the Electricity Act 2024 applies to Freeport. URCA has grasped the nettle and sued the Port Authority as a result of the Port Authority’s decision to consider the rate application.

“URCA has filed an action. Everybody is eager to get this issue about the regulatory authority over electricity sorted out, and have it decided one way or the other. URCA is the regulator outside the Port area already. The question is whether URCA is the regulator inside the Port area.”

URCA’s action is effectively asking the Supreme Court to determine the same issue - who has regulatory authority for electricity and other utilities in Freeport - as that contained in the 2016 case filed against itself by GB Power. The latter action, though, was based on the original Electricity Act that was implemented in 2016 while URCA’s is derived from the more modern statute law passed by Parliament earlier this year.

As a result, some observers suggested that GB Power’s eight year-old claim - which remains before Justice Loren Klein and has yet to be decided - may be superseded by URCA’s

given that the regulator’s action is based on the existing Act and not the repealed one.

“That may render the Power Company’s action unnecessary because the law has changed. The two Acts are substantially the same, but the 2024 version is a new piece of legislation,” one source said. While URCA hinted strongly that it would revert to the courts, stating in September that it “will use all avenues available under the law”, its move to actually initiate legal action has been kept quiet and previously known to very few.’

Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC) and a long-time GG Power critic, said yesterday he had been aware of URCA’s bid for legal recourse but had been asked not to say anything on it publicly. Giving his backing to the regulator’s move, he explained that he is only speaking out now after Tribune Business uncovered the development.

The crux of the dispute remains the same, with URCA arguing that statute law passed by Parliament in the form of the Electricity Act gives it the authority to regulate energy within Freeport. However, the GBPA has argued that Freeport’s founding treaty, the Hawksbill Creek Agreement, bestows supervisory authority for all utilities within the Port area on itself and is superior to statute law.

This will now have to be settled by the Supreme Court but Pastor Victor argued that the concept of the GBPA continuing to oversee Freeport’s energy and utilities sector was incompatible with having a national regulator and means The Bahamas is not aligned with best and accepted global practices.

“My position is that it’s about time that it happened,” he told Tribune Business of URCA’s legal action. “We realise the whole regulatory regime in Freeport needs to line up with the rest of The Bahamas. By virtue of the fact we already have a population that is being regulated [by URCA] outside of the Freeport area, that really always should have been under URCA.

“If you follow the pattern of what has happened over the years, where the Government’s agencies function in Freeport - police, Customs, Immigration and a lot of other departments - if we have a government-appointed regulator they, too, should be functioning here. And particularly at this stage, where energy and electricity is really important.”

Pointing to the fact that GB Power supplies homes and businesses outside Freeport, and which are outside the GBPA’s regulatory purview, Pastor Victor added: “We have territories outside of Freeport being affected by regulation in Freeport. If those territories are not coming under URCA, they should not be subject to any regulatory decisions in Freeport.”

Explaining that he was referring to settlements such as Pinder’s Point, Lewis Yard, Williams Town and Hunter’s, he said: “It should all be under URCA. We welcome it. Particularly based on what happened in the past year. It shows the regulatory regime is not working.”

Grand Bahama was subjected to a several months of frequent power outages and blackouts, sometimes lasting for several hours, as a result of GB Power’s generation challenges and mechanical breakdowns associated with key engines. This prompted the GBPA to place its review of the tariff proposal, which would cover 2025 through to end-2027, on hold although there are signs the process is now being revived.

Pastor Victor, meanwhile, challenged why GB Power’s earlier action has yet to be decided despite being launched before the Supreme Court some eight years ago. “Why has this whole matter been stuck in the courts for so long?

That’s a question we need to put out there,” he argued.

“The Government brought in the original Act in 2015 and changed it this year to deal with the regulatory problem in Grand Bahama,” Pastor Victor added. “As part of the process, this whole Act was created to make sure regulation is uniform throughout The Bahamas. We need it.”

The new Electricity Act 2024, which treats Grand Bahama as a Family Island, makes the Grand Bahama Power Company the “approving authority” for anyone submitting a proposal to supply electricity to the public on the island.

The Act states that any approvals by such an “authority” must also be given the go-ahead by URCA, and this has been interpreted as a neat way of circumventing the GBPA’s utilities regulatory authority in Freeport and transferring it to URCA via GB Power Company. Thus the stage for a major regulatory and legal clash has been set.

GB Power, in its still-live 2016 claim, had initially sought an injunction to prevent URCA “from regulating, or seeking to exercise licensing and regulatory authority” over it. GB Power’s action is founded on the basis that, as a GBPA licensee, it is licensed and regulated by the latter via the Hawksbill Creek Agreement - and not by URCA and the original Electricity Act 2015.

It is arguing that the previous Electricity Act’s sections 44-46, which gave URCA the legal right to licence and oversee energy providers, “are inconsistent, and conflict with, the rights and privileges vested in [GB Power] and the Port Authority” by the Hawksbill Creek Agreement.

GB Power’s statement of claim argues that itself and the GBPA “have been vested with the sole authority to operate utilities”, including electricity generation and transmission and distribution, within the Port area until the Hawksbill Creek’s expiration in 2054. Cable Bahamas, too, also has a separate legal action contesting URCA’s jurisdiction and authority to regulate its Freeport subsidiary, Cable Freeport.