The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Delays to the probe into the legality of Bahamas Power & Light’s (BPL) 2022-2023 fuel tariff hikes, which soared by 163 percent in just eight months, “raise suspicions and concerns”, it was argued yesterday.

Branville McCartney, the former Democratic National Alliance (DNA) leader, told Tribune Business that Bahamian citizens, households and businesses have “a right to know” why the fuel charge portion of their BPL bill was so much higher than what the electricity utility was actually paying its fuel suppliers over the 17-month period between October 2022 and February 2024.

And his call for the investigation’s findings to be made publicly available with “haste” was backed by Michael Pintard, the Opposition’s leader, who challenged why the Utilities Regulation and Competition Authority (URCA) has yet to complete an inquiry into whether BPL violated the law and accompanying regulations in collecting an extra $100m in recovered fuel costs from households and businesses.

The two men spoke out after URCA, in its 2025 annual plan, revealed that the probe has been delayed and is now scheduled to be completed next year after the costs involved exceeded the budget allocated by the regulator. As a result, the investigation’s scope has been “adjusted”, although it was not explained what this means, and the contract to carry it out has been re-bid.

“It’s vitally important that the Bahamian people are made aware of the reasons why those fuel prices were hiked and the cause of it,” Mr McCartney told this newspaper. “We are the people who paid for it, and we should know. If you are paying for any type of increase, then those paying ought to know why.

“By not informing the public of what the cause would have been, that raises suspicions. It’s about trust. It [the delay] is certainly a disservice to the public, and causes grave concerns and curiosity as to why information is not forthcoming.

“As a matter of fact, it should be a right. The people of the country have to know what they’re paying for and the results of that report. We look forward to the end result and the findings. We as a people, we still ought to know. You never know what the findings may dictate; it may lead to other reports becoming necessary.” 

Urging URCA to “make haste and make available”, Mr McCartney added of the fuel tariff hikes’ impact when they occurred: “Not only are they costing a pretty penny, but for many businesses and households they were unable to operate or even have electricity in their households. Make haste and make available. Period.”

Mr Pintard, meanwhile, asserted that it was “frankly disappointing and odd” that URCA has not made more progress with its investigation. He suggested that, with significant information already in the public domain, it was surprising that no preliminary report or findings have been produced.

“The Opposition has already gone on record as supporting a fulsome investigation into the matter. But it is frankly disappointing and odd that, by now, URCA is unable to provide at least a preliminary assessment of the matter with so much information readily available,” he said.

“We have brought up this matter in Parliament and we have written to URCA directly to demand an explanation on the following: Has BPL followed the law in relation to its use of revenue generated from a fuel surcharge?

“Given the permission of BPL from URCA to use a portion of its massive increase in surcharge to pay off a temporary loan obtained to cover fuel arrears, did BPL in fact use those funds as mandated by URCA? And if the funds were used to pay off the loan, why do government financial reports still indicate the majority of the loan outstanding?” Mr Pintard continued.

“With the information that is in the public domain, and with the information that URCA can command from BPL, there is no reason why URCA cannot provide a preliminary determination as to whether BPL is compliant with the lawful directives of URCA.

“It can not be that BPL has collected well over $100m in burdensome surcharges under a specific mandate, but URCA is still not able to indicate if BPL has operated within the parameters set by the regulator.”

Bahamian businesses and households alike are likely to be keen to know why they were burdened by such excessive charges for at least a 17-month period from October 2022 to February 2024 as BPL’s ‘glide path’ strategy sought to regain what was described as ‘under-recovered’ fuel costs.

Tribune Business reported at the time that the BPL ‘glide path’ initiative violated the law and accompanying regulations in at least two instances. In the run-up to the ‘glide path’s’ implementation, the state-owned energy monopoly seemingly breached regulations introduced in 2020 that mandated it pass 100 percent of incurred fuel costs on to consumers via fuel charge portion of their bill.

For the period from November 2021 to October 2022, BPL seemingly failed to do this by keeping its fuel tariff at a constant 10.5 cents per kilowatt hour (KWh) even though its fuel hedge was unwinding because the newly-elected Davis administration had elected not to carry out the trades required to source more low-cost oil/fuel to support this price. As the hedge unwound, BPL’s rising fuel costs were not passed to customers.

And, in the second instance, several sources suggested there was no legal or lawful basis for BPL to segment clients into two groups based on whether they consumed less or more than 800 kilowatt hours per month and charge them different fuel tariffs based on this. They explained that the law and regulations only allowed BPL to charge the same rate for all customers on the fuel charge portion of the bill.

It remains to be seen whether URCA’s promised review will be completed and ever made public. Both BPL and the Government are likely to be less eager for its publication not least because it will revive memories of ruinous energy costs for many as a result of the soaring fuel charge, which resulted from the failure to support the hedge and the Prime Minister’s decision to hold the tariff at 10.5 cents when it was not supported.