The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner yesterday pledged to take a 20 percent hike in energy costs from Bahamas Power & Light’s (BPL) new rate structure “on the chin” and not pass the increase on to consumers.

Rupert Roberts told Tribune Business that the 13-store chain, which also trades under the Quality Supermarkets brand, will “roll with the punches” while describing the Equity Rate Adjustment (ERA) tariffs as a ploy whereby “big business will subsidise the voters”.

Pointing out that BPL’s new tariff structure, which incorporates increased base rates for food stores and other larges energy users, could result in some businesses passing these higher costs on to shoppers, he added that small and medium-sized grocers were now likely to be in this position with total expenses exceeding gross profits.

Affirming that Super Value will “roll with the punches”, with some of the impact mitigated by the introduction of solar energy across its store network, Mr Roberts told this newspaper that the supermarket chain had seen a material increase in its light bill since BPL’s new rates went into effect just over two months ago on July 1.

“I’ve checked our bills and we’re up 20 percent,” he said. “The last three bills, when I got the second bill, it was up 20 percent. The third one then stayed the same. Our bill went up 20 percent. I’m surprised it’s only 20 percent.

“One of the other retail grocers called complaining theirs had gone up. Ours was up 20 percent. It’s another cost that we have to consider. When costs go above gross profit, you have to raise your prices or go out of business. I imagine it’s reached to that extent with the smaller grocers.”

Mr Roberts implied that Super Value has sufficient scale to avoid increasing prices as a result of the latest energy cost hike. The Davis administration, in unveiling BPL’s new tariff structure, only increased base rates for the utility’s several hundred ‘general service’ customers who it said represent less than 1 percent of the total 113,000 customer base.

This category, which includes the likes of hotels as well as food stores, now have to contend with a base rate that has increased by 14.9 percent for the first 900,000 kilowatt hours (KWh) of energy consumed - from 8.7 cents per KWh to 10 cents. And, for consumption above 900,000 KWH, these businesses have seen the tariff rise by 45 percent from 6.2 cents per KWh to 9 cents.

The Equity Rate Adjustment structure, as published on the Prime Minister’s Office’s website, shows that all other BPL base rates - those for residential, commercial and temporary supply customers - have all been cut or remained the same.

Residential customers now receive the first 200 KWh per month free, which translates into a saving of about $21-$22 per months or around $250-$260 per year, with the Government hailing this as a reward for low energy users and a means to aid the most vulnerable low income families.

It has also adjusted BPL’s fuel charge. All customers are now enjoying a 2.5 cent discount on the first 800 KWh of energy consumed, but then having to pay an additional 1.5 cents levy on top of the calculated fuel charge above this threshold, with the Davis administration touting this as a further incentive for Bahamians to reduce energy consumption.

The Government previously said all BPL customer categories, apart from the likes of Super Value and other ‘general service’ users, should enjoy a reduction in their energy bills as a result although it was quick to add that this may not be seen immediately - and costs could go higher initially - due to the extra summer consumption more than offsetting the reduced rates,

Mr Roberts, though, yesterday described the Equity Rate Adjustment as effectively an effort to carry out social policy by placing the burden on big businesses to finance the discounts and concessions for Bahamian households ahead of a general election that is some two years away.

“What I think is it’s big business subsidising the voters,” he told Tribune Business. “That’s the way I see it. Super Value doesn’t vote, although our 1,200 employees do. It’s not a political thing; it’s a cost of living and inflation thing. If they put it on the grocers, the grocers have to pass it back to the voter.”

Asked whether Super Value plans to pass at least a portion of the energy cost increase on to consumers, Mr Roberts replied: “We’re not going to do it. We’re going to take it on the chin. The people can’t take it. We cannot tax people the way that the Government can, so we have to roll with the punches.”

George Turnquest, who runs Fox Hill’s Cotton Tree Convenience Store with his son after handing the business on to him, told Tribune Business that its light bill has increased by $3,000, representing a rise of between 32-35 percent, since the introduction of BPL’s new tariff structure on July 1, 2024.

“My light bill has gone up by $3,000 from July to now. It’s between a 32-35 percent increase,” he revealed yesterday. “To me, it’s detrimental to the average business person especially the medium-sized and small businesses. There’s no way that they can sustain this type of increase. It puts us in a bind. It’s outrageous what they’re doing to us.

“Many small and medium-sized businesses can’t keep the light on. They have no conscience to do this. All these things are killing the average man, the small man and the middle man. The big man making $10,000 to $15,000, he can slip to $5,000 and still survive, but the small man, if you drop him down he drops out.”

Slamming what he described as a lack of public consultation over the new BPL rate structure and its consequences, Mr Turnquest said Cotton Tree and other food stores have no choice but to consume energy round-the-clock 24/7 because of the need to run their refrigerators and appliances to keep perishable goods fresh. Other industries can turn their lights off when they close.

“We get no consideration at all,” he said, adding that food retailers “need to have a meeting of the minds” and, via the Retail Grocers Association, “see about agreeing an approach or recommendation to the Government” to alleviate the concerns.

“The consensus is we need a meeting because if we don’t say anything, silence is consent,” Mr Turnquest added. “We are hurting. That is going to hurt a lot of people. I know some people will increase their prices to deal with this. I’m going to call all the people I know, have a meeting and see where this goes.

“I don’t know where people will get this money to pay for this. You pay Business Licence on your gross sales, and there are many people who owe the Government who are paying in installments. With this [energy] increase, where the hell are you going to get your money from?

“The Government should think about this. You have NIB, you have all these things that you are paying. How much blood have you got? It all boils down to the average person not being aware of the damage being done to them. The grocery stores may put up their prices.”

Philip Beneby, the Retail Grocers Association’s president, told Tribune Business of the new BPL tariff structure: “There has been an increase in the rates for sure. I couldn’t say for sure what the percentage is, but that is an added cost.

“I’m just hoping that at some point it will decrease back to the level where it was. I think that is what they [the Government] are promising but I don’t know how long that will take. We always try to hold increases in expenses rather than passing them on but there’s only so much we can hold, only so much, and for so long.

“Everybody is feeling the pinch. The public is feeling the increases as well. Businesses have to survive and keep their doors open. We try to hold back any increases to a minimum as much as we possibly can. We try to find other ways to absorb them or work with them but there is only so much we can do. The business has to operate and carry on. They have staff to pay and everything else.”