The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) yesterday potentially opened a new quarrel in its battle with the Government by asserting its “longstanding regulatory authority” over all utilities within Freeport.

The city’s quasi-governmental authority, in a statement likely to infuriate the Davis administration, voiced optimism that the Supreme Court will affirm its position despite the recently-passed Electricity Act reforms that seek to bypass the GBPA when it comes to energy regulation.

Ian Rolle, the GBPA’s president, was quoted as saying it “remains resolute in our stance” that the provisions in the Hawksbill Creek Agreement supersede - and are superior to - the statute law amendments designed to circumvent it by making the Utilities Regulation and Competition Authority (URCA) the supervisory body for all utilities in Freeport.

The court action alluded to in the statement is the 2015 case initiated by Grand Bahama Power Company (GBPA), the island’s energy provider, challenging URCA’s ability to licence and regulate it because its supervisory body is the GBPA as provided for in Freeport’s founding treaty, the Hawksbill Creek Agreement.

Ryan Pinder KC, the attorney general, told Tribune Business via messaged reply to this newspaper’s questions that the Government’s position that a national regulator such as URCA - rather than the GBPA - should have regulatory oversight for all utilities in Freeport has not changed for almost a decade.

“This matter has been in the courts since the Electricity Act 2015. The position of the Government remains the same since 2015. Nothing has changed,” Mr Pinder said. The Supreme Court has yet to rule on the substantive merits of the case sparked by GB Power’s claim, with the GBPA saying its comments are a response to the Prime Minister’s remarks about its “potential removal” as electricity regulator.

The GBPA’s response, though, comes at an especially sensitive time in Nassau-Freeport relations since both itself and the Government are moving through the process towards eventual arbitration proceedings over the latter’s assertion that it is owed $357m for the provision of public/government services over and above tax revenues generated by the city between 2018 and 2022.

By seemingly digging in its heels over the utilities regulation issue, the GBPA is likely at best irritate the Davis administration - not least because the latter’s recent Electricity Act reforms sought to circumvent the ability of Freeport’s quasi-governmental authority to regulate the energy sector.

The Electricity Act, 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. It thus appears the Government is eyeing a further way to squeeze the GBPA, and erode and strip it of its ability to regulate utilities in the Port area.

However, Grand Bahama Power Company subsequently revealed it was never consulted on the reforms and had to learn about them “in the papers”. And, in response to Philip Davis KC’s comments, the GBPA yesterday said: “We wish to reaffirm our long-standing regulatory authority.”

Arguing that its position is backed by a solid legal foundation, the GBPA added: “The Hawksbill Creek Agreement, a cornerstone of our governance structure, granted GBPA the right and responsibility of regulating all utilities within the City of Freeport.

“In 1993, with the execution of the east and west agreements, this mandate was extended to include government territories on the island of Grand Bahama. Since the inception of the Hawksbill Creek Agreement, no Act of Parliament has superseded its provisions.

“Under Clause 2 (21) and 2 (23) (a) of the Hawksbill Creek Agreement, GBPA and GB Power - as a licensee of GBPA - have been vested with the sole authority to operate utilities, including electricity generation, transmission and distribution, within the Port area until the Hawksbill Creek Agreement’s expiration in 2054 without having to obtain a permit or licence from the Government of the Bahamas or any department or licensing thereof.”

Applying this to the Government’s recent legislative reforms, the GBPA added: “As such, the Electricity Act, which attempts to give URCA the legal right to licence and oversee energy providers, is inconsistent with - and conflicts with - the rights and privileges vested in GB Power and the GBPA by the Hawksbill Creek Agreement.

“An action was commenced in the Supreme Court to challenge URCA’s ability to licence and regulate on the basis that these conflict with the provisions of the Hawksbill Creek Agreement as Freeport’s founding treaty. We will continue to defend our positions, and it is important to point out that there have been over a dozen successfully litigated cases that have set a judicial precedent for the GBPA’s exclusive regulatory authority in Freeport.”

Mr Rolle added: “We remain resolute in our stance that we are indeed the rightful regulator for the city of Freeport, encompassing both power and water services. Our commitment to this role is steadfast, and we are currently before the Supreme Court to affirm our position.

“We are confident that the court will uphold our regulatory authority. Defending the Hawksbill Creek Agreement is vital for the benefit of our licensees and the residents of Freeport.” The fear has also been that agreeing to URCA’s regulation of Freeport utilities could set a dangerous precedent that undermines the city’s founding treaty by paving the way for further inroads into its provisions.

The GBPA then touted the regulatory framework established to supervise GB Power as having helped to facilitate more than $150m worth of investments by the latter in its electricity infrastructure “over the past years”, although no timeline was given for when this was made. GB Power’s rate stability, ensuring predictability and fairness for consumers, was also touted.

“Our collaborative approach with the Grand Bahama Power Company has led to a regulatory model that prioritises reliability, efficiency, and customer satisfaction,” said Mr Rolle. The GBPA added: “We look forward to the judiciary reinforcing our regulatory authority and, in the meantime, GBPA will continue to fulfill its responsibilities as the regulator for utilities in Freeport.”

GB Power, in its still-live Supreme Court action, 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 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.