The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Opposition’s leader yesterday demanded that “someone has to answer” why Bahamas Power & Light’s (BPL) $184m debt has not been cut more drastically after last year’s up to 163 percent fuel charge hikes.

Michael Pintard questioned to Tribune Business why the sum owed to the Government by the state-owned electricity monopoly has seemingly only been slashed by $8.3m despite the “tremendous amounts of money” generated from the huge electricity bill and fuel charge burden imposed on Bahamian households and businesses.

BPL’s so-called fuel charge “glide path” strategy, which has been in place from October 2022 to the present, was intended to raise sufficient sums to pay-off BPL’s “under-recovered” fuel costs that resulted from the utility not passing these on to consumers 100 percent - as required by law and regulations - over the 12-month period from October 2021.

Jobeth Coleby-Davis, minister of energy and transport, confirmed to the House of Assembly on Wednesday “that BPL was granted a $110m loan by the Government to address the under-recovery of fuel costs as a result of the COVID- 19 pandemic”. Given that the Government is not supposed to loan money to, or subsidise, BPL, the fuel charge hikes that peaked last summer were to finance repayment of this loan.

However, the Ministry of Finance’s public debt statistical bulletin for the 2023-2024 fiscal year’s second quarter, which covers the three months to end-December 2023, showed that BPL’s indebtedness to the Government has changed little since March last year when it peaked at $192.3m. Given that the sum outstanding stood at $184m at 2023 year-end, the debt reduced by just $8.3m over nine months.

This was despite the excess monies coming in from the fuel charge hikes, and Mr Pintard yesterday questioned what these funds had been used for given the relatively modest decline in BPL’s indebtedness to the Government.

Tribune Business had earlier this week sought to obtain the same answer from BPL and the Ministry of Finance as to why the loan had not been paid down further. However, Shevonn Cambridge, BPL’s chief executive, referred this newspaper to the utility’s public relations spokespersons, who in turn said Mrs Coleby-Davis would address the matter in the House of Assembly - which she did not.

And, when contacted by Tribune Business on the issue, Simon Wilson, the Ministry of Finance’s financial secretary, said simply: “That’s a discussion you need to have with BPL.” Mr Pintard, though, yesterday also called out energy industry regulator, the Utilities Regulation and Competition Authority (URCA), to confirm whether it has been monitoring how BPL is using its extra fuel charge ‘glide path’ income.

“The Governments data clearly shows that funds due to Shell [BPL’s fuel supplier] for fuel remains unacceptably high,” Mr Pintard said in a statement referring to the outstanding $184m. “This is disturbing especially since the Government determined that they would raise the fuel pass through rates to what the public believes to be unacceptably high levels.

“In response, URCA approved the ‘glide path’ that enabled BPL to do so. At that time the FNM registered our objection, and asked URCA for a full account of the rationale for their decision. We now ask URCA to confirm whether or not they have been monitoring whether or not the Government has applied the funds earned from the ‘glide path’ to paying the fuel charge to Shell and, if they have not been doing so, have URCA made it clear that this dereliction of duty is a violation of the law?”

Speaking subsequently to Tribune Business, the Opposition leader said: “I’d say someone has to answer. URCA has the responsibility to ensure that the Government is following the law and what it had committed to when they set up the ‘glide path’. And, more so, URCA endorsed what they did. They never responded publicly with the justification when we raised the rationale for approving it.

“BPL ought to independently say have they honoured the agreement, and the Ministry of Finance have equal responsibility for clarifying how the funds were spent and ought to explain if it [the loan] has not been paid off, why hasn’t it, given that BPL generated a tremendous amount of money from the ‘glide path’ to pay off the debts incurred.

“What are you doing if the debt is not repaid in full? Someone has to answer. They have a lot of explaining to do. URCA ought to be proactive in speaking to the issue. They have a responsibility. They signed off on the provider issuing these additional bills. I’m sure they are look- ing at the balance sheet and rate of repayment and realised there’s been no significant movement,” Mr Pintard added.

“They have a duty of care to ask what have you done with the money? What other expenses have you incurred?” Mrs Coleby-Davis on Wednesday confirmed that through BPL’s fuel charge hikes the utility had “been able to recover a significant portion of the under-recovered amount allowing us to resume and fund critical infrastructure projects”.

The $110m loan was first disclosed in the Ministry of Finance’s public debt statistical bulletin for the three months to end-March 2023, and reported on by Tribune Business at the time.

Mr Wilson, the Ministry of Finance’s financial secretary, at the time confirmed the $80m increase in government loans to state- owned enterprises (SOEs) and agencies for that quarter, and $110m jump over the previous nine months, was to enable BPL to pay off past-due and outstanding debts to its fuel supplier, Shell.

Meanwhile, Mr Pintard yesterday slammed Mrs Coleby-Davis’ explanation that BPL’s fuel cost under- recovery, and the need to hike consumer bills since October 2022, was because the Government had