The Tribune

By NEIL HARTNELL 

Tribune Business Editor 

nhartnell@tribunemedia.net

BAHAMAS Power & Light (BPL) must reduce the frequency and length of power outages by 40 percent and 60 percent, respectively, to meet standards set by its regulator, it was revealed yesterday.

The Utilities Regulation and Competition Authority (URCA), unveiling the findings of a consultant’s performance and operational audit of the state-owned utility, said there was much room for improvement with total losses from BPL’s distribution grid having increased by more than 25 percent since 2017.

Castalia, the consultant, also found that BPL’s infrastructure lacked any redundancy or excess capacity to cope with peak summer demand should a substation or “critical network component” fail. Some 10 percent of substations were said to need replacing, with an equal percentage requiring an upgrade or repairs.

And the audit reported that the availability of BPL’s generation capacity is low compared to the industry average at 66 percent and 61 percent for New Providence and the Family Islands, respectively, while affirming that maintenance is “often deferred” due to limited reserve capacity and parts inventories.

Giving an insight into why the Government has accelerated its energy reform plans so sharply, URCA said of the findings: “BPL needs to invest an estimated $500m to refurbish and replace its aging generation, transmission and distribution assets.

“The network needs investment, as it is reaching maximum capacity: There is no N-1 (spare unit) redundancy in the summer peak should one substation or critical network component go down. Around 10 percent of substations need replacing, and another 10 percent need an upgrade or repair. Further, some base designs are over 20 years old.

“Investment in the grid can also help reduce losses. System losses in New Providence have increased more than 25 percent since 2017, now at 10.2 percent.” System losses represent both so-called technical and non-technical losses of electricity generated by BPL when it is dispatched around its grid.

Technical losses refers to energy lost through BPL’s cables and transformers, while non-technical losses represent electricity that is consumed by customers but not billed due to metering and billing system inefficiencies plus fraud and theft. The URCA audit findings show that more than one-tenth of electricity produced by BPL is being lost from the grid before it reaches customers and/or is billed.

BPL, though, disputed some of the audit findings. “In reference to Castalia’s statement in the draft report that ‘Service reliability is relatively poor, with relatively high system losses of 13 percent and low system reliability’.... BPL has pointed out that it should be noted that this figure includes both technical and non-technical losses,” it added.

“In response to the audit statement that ‘the T&D network is reaching maximum capacity: There is no N-1 redundancy in the summer peak should one substation or critical network component go down’, BPL has contended that this is not entirely true for all operations.

“BPL posited that this may be true in the Family Islands which are predominantly radial feeds but not true for New Providence T&D networks. There are challenges for a few transmission circuits during the summer peak, but not all of them.” Castalia “noted the response”.

And, as for system losses, BPL moved to correct the 13 percent figure. It produced revised data showing system losses increased from a low of 8.06 percent in 2017-2018 to a peak of 11.74 percent in 2021-2022 before dropping down to 10.19 percent in 2022-2023. Castalia accepted those figures.

However, URCA said of the consultant’s findings: “The audit found that although BPL schedules planned maintenance for the winter period to ensure adequate reserve margin for the summer peak, maintenance is mostly reactive rather than preventative. BPL often defers planned maintenance due to limited reserve capacity and inventory challenges.

“The availability factor in New Providence averages 66 percent, while it is slightly lower (61 percent) across the Family Islands. This is relatively low compared to other utilities. Lower availability factors may indicate more frequent breakdowns and the need for more repairs due to poor maintenance and operation protocols.

“BPL has installed automated generation control in New Providence and plans to implement an Enterprise Asset Management system, which will help monitor the condition of all network assets in real-time and direct preventive and corrective maintenance optimally.”

Maintenance issues were having a direct impact on the reliability of BPL’s energy supply. “Benchmarking reliability indicators shows that BPL’s customers experience more frequent interruptions compared to other utilities, but interruptions do not last as long. This indicates that BPL responds to outages relatively well but could improve on preventing outages before they occur,” URCA said.

“The audit found that since 2021, reliability has improved but remains relatively poor. In 2023, the System Average Interruption Duration Index (SAIDI) was 593 minutes per customer, and the System Average Interruption Frequency Index (SAIFI) was 10.5 interruptions per customer.

“BPL will need to improve its performance significantly to reach the reliability targets proposed by URCA. BPL will have to reduce SAIDI and SAIFI in New Providence by almost 60 and 40 percent, respectively,” URCA continued.

“The audit reveals that BPL lacks a multi-year plan for infrastructure upgrades and investments, which makes it difficult to project capital expenses accurately and develop a strategy to optimise asset utilisation. The lack of forward-looking planning makes risk management and planning reactive rather than preventative.

“BPL’s budgeting and planning processes are largely manual. Budgeting is done in Excel using information generated from AS400 software. While the software is functional to support budgeting and accounting, it needs upgrading, and manual data exports may be required to realign data.”

URCA also said close to one out of every ten BPL staff is due to retire over the next four years to 2027. “The audit found that BPL has no clear strategy to anticipate or plan to replace the loss of skills due to employee attrition in the medium to long-term. BPL conducts mostly reactive and short-term analysis and planning of its workforce needs,” it added.

“The audit also found that BPL risks losing institutional knowledge and technical expertise due to unplanned exits and retirement, as almost 9 percent of staff will become eligible to retire between 2023 and 2027...

“Small, old, and relatively inefficient ADO units generate almost all electricity on Family Islands. The average age of generation units in the Family Islands is 23 years, more than double the average age of units in New Providence (ten years). Ensuring generation units remain operational 24/7 has been challenging in the Family Islands due to a lack of skills and capital and the overload of current staff,” URCA said.

“According to its licence, BPL must, to a reasonable extent, implement modern technological solutions to secure optimal efficiencies in its operations. Although BPL has made efforts to commission new, more efficient units, it does not fully meet these provisions of its licence, particularly in the Family Islands.”