The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

THE Bahamas’ main airport gateway suffered a 900 percent increase in its Water & Sewerage bills during its 2022-2023 financial term as total utility costs surged by $1.5m year-over-year.

Kevin McDonald, the Nassau Airport Development Company’s (NAD) vice-president of maintenance and engineering, told a panel discussion at the Ministry of Energy and Transport’s energy forum that the Lynden Pindling International Airport (LPIA) operator’s total utility expenses rose by 45 percent - from $3.3m to $4.8m - during that financial year.

He explained that this was due to the combination of Bahamas Power & Light (BPL) hiking its fuel costs by up to 163 percent to recover previous unbilled sums via its so-called ‘glide path’ strategy, while the Water & Sewerage Corporation introduced the metering of sewerage effluent. As a result of the latter’s move, NAD was almost billed in one month what it had been charged for the previous full year. 

Mr McDonald said the introduction of BPL’s ‘glide path’ increased the airport’s electricity bills by 160 percent. And, due to the billing changes at the Water and Sewerage Corporation, the latter’s bill ballooned from $28,000 annually to $24,000 monthly.

“When we look at the period from 2022 to 2023, BPL introduced their fuel surcharge glide path and our budget was already set for that year,” he added. “But what we saw within the next 10 to 12 months was the fact that our fuel surcharge went up from about 10.5 cents (per kilowatt hour) to a high of 27.6 cents or something in that area.

“Now appreciate that the airport consumes on average about 15 gigawatt hours of power annually, and so when we talk about an increase that equates to roughly about 160 percent within one calendar period, that is significant. That resulted in a hit to the bottom line of just under $900,000.

“In addition to that, Water and Sewerage Cooperation decided that they would introduce the actual metering of our sewage effluent. We went from where we were paying annually, to Water and Sewerage, about $28,000 per annum to paying them $24,000 per month. So that was about a 900 percent increase in terms of sewerage processing fees.”

Mr McDonald said that although NAD saw a 20 percent increase in passengers during the same 2022-2023 financial year this did not offset the sharp rise in operating costs.

“When we look at the period from 2022 to 2023, thankfully we were coming out of the pandemic. We saw about a 20 percent increase in our passenger numbers year-over-year, but the thing about airports that a lot of folks don’t realise is that we have a very high minimum operating cost,” said Mr McDonald.

“If we have a few dozen passengers in the terminals, or we have thousands of passengers in the terminals, the terminals have to be lit, they have to be cooled, all of the systems that are required to move passengers and bags must be functional, so energy for us is very important.”

Mr McDonald said NAD will continue to improve its resilience and reduce energy costs through the implementation of a solar plant that will be unveiled next year. He added that the company recently closed a bidding process for the solar plant which, when implemented, will ensure the airport gateway can continue to operate its equipment and service clients effectively during a power outage.

“We continue to evolve our energy conservation plan, and we just recently closed an RFP (request for proposal) for the design of a scalable one mega watt (MW) to five MW solar plant that will be introduced at LPIA in calendar year, through faith, of 2025,” said Mr McDonald.

“For us, one of the worst things that can possibly happen is for the Customs hall to be pitched into darkness while a first-time guest is waiting on their bags to arrive on the carousel. Additionally, the airport itself has a lot of sophisticated systems that are required to move bags and passengers, so those power outages are very disruptive.

“Notwithstanding the fact that we have a lot of redundant emergency capacity, our generators take 15 seconds in terms of coming on and coming up to full speed for the power to be transferred. And so that is why this initiative is very important, and then it will also assist us in terms of the uptime serviceability of that critical equipment and then, naturally, when you think about LPIA as a consortium of businesses.

“LPIA is one of the major gateways into the capital and serves as number one industry, tourism. And so it is critically important for us to transition where we have renewable energy at LPIA, and so it’s progressing well and we’re getting to the point where we are excited about the fact that within about a year from now we should see the real fruits of our labour.”