The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A long-time Grand Bahama Power Company critic yesterday accused the utility of being “out of touch” with consumers as it unveiled a five-year, $76.6m capital investment plan.

Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC), told Tribune Business that few businesses and residents have in assertions by GB Power’s top executive that 75 percent will experience either no increase or a decrease in electricity costs under the proposed new three-year tariff structure as similar past pledges “didn’t actually pan out”.

Speaking as the Grand Bahama Port Authority (GBPA), acting in its capacity as GB Power’s regulator, disclosed more details about revised electricity rates that will take effect from January 1, 2025, if approved, he added that there had been a breakdown in trust between the utility and its customers due to both past and current experience.

Arguing that the recent daily outages showed “profits are taking priority over performance”, Pastor Victor told this newspaper that “the Power Company needs to stand down and the Port Authority needs to stand up” to Grand Bahama’s electricity monopoly over its request for a 6.32 percent base rate hike covering the period from 2025 through to year-end 2027.

And, if GB Power is unable to “create the necessary municipal partnership with the residents and businesses of Freeport”, he argued that its 100 percent owner, Canadian utility giant Emera, “needs to get out of The Bahamas and let another company come in” in its stead.

The GBPA yesterday published further details of GB Power’s three-year tariff proposal which is more complex than previously disclosed. Besides the 6.32 percent base rate increase, which has been the focus of political and public protest, the utility is also seeking to “transfer the charge associated with the PharmaChem shutdown” to this tariff.

What this means, and the implications for consumers, is not explained but PharmaChem - which went into Supreme Court-supervised liquidation earlier this year  was GB Power’s largest customer accounting for 5 percent of total load demand.

The documents released by the GBPA affirm that the storm recovery charges related to Hurricanes Matthew and Dorian, which added around one cent per kilowatt hour (KWh) to customer bills, will fall away in 2024 and 2026, respectively.

However, GB Power is now seeking what it terms an “additional regulatory asset recovery” via its fuel charge “to catch up on amortisations that were suspended after Hurricane Matthew” to ease the financial burden on long-suffering businesses and residents.

This will add 0.5 cents to per KWh to consumer bills in 2025, it was revealed yesterday, and one cent n 2026 and 2027. As a result, even with the benefits of hedging that has locked in the price that GB Power will pay for much of its fuel, the utility is predicting that the fuel charge consumers will pay will increase from 12.44 cents per KWh in 2025 to 13.83 cents in 2026 and then to 14.39 cents in 2027.

As to what this means for consumers, the data released yesterday projects that - despite the 6.32 percent base rate increase - residential consumers who use less than 600 KWh per month will see a modest $1 reduction in their all-in total monthly electricity costs in 2025 when compared to current rates.

However, residential consumers using above 600 KWh per month are forecast to see a slight increase in their monthly bill of $1. And commercial customers using from 1,000 KWh per month to 50,000 KWh per month will see their all-in cost jump by between $3.10 to $67.97, or 0.79 percent to 0.37 percent, based on GB Power’s submission.

While estimates for commercial customers will vary based on their specific demand, GB Power’s estimates showed that all classes of customers - from the smallest residential user to the large industrials - will see their total monthly energy costs rise in 2026. The extent of the increase will range from $2.64 to $803.91 (largest users), representing a rise of between 4.05 percent and 4.52 percent in percentage terms.

GB Power, using current rates and fuel charges as the base for its calculations, then forecast that the all-in electricity cost for 2027 will drop compared to 2026 although prices will still be slightly higher than those seen next year.

The GBPA, in a statement announcing the start of the 45-day public consultation on GB Power’s rate proposal, said: “In its filing, Grand Bahama Power proposed investments of $8.4m over the next three years focused on enhancing system reliability and efficiency.

“These include the significant upgrades to transmission and distribution infrastructure slated at a cost of $3m to support growth in a critical area, as well as battery storage investments of $4.5m to aid in the capture and efficient use of energy generated from solar systems.

“Further, in outlining the all-in rate impact on various customer classes, GB Power’s filing states that residential, general service large, and large industrial customers’ all-in costs will remain relatively unchanged in the first year, with less than a 1 percent change from current all-in costs,” the GBPA added.

“While there will be varying adjustments each year, the all-in cost is projected to reach its maximum increase of 4 percent in 2026 before levelling off with a 2.5 percent change in 2027 from current rates.” In the material release yesterday, GB Power said it is targeting an increase in average base rate revenue from $269.9m in 2023 to $277.5m over the next three-year period - a rise of $7.6m.

It is forecasting that a 10 percent increase in electricity sales over the three-year period through end-2027, calculated in mega watt (mWh) hours, will help it to achieve this base rate increase. Sales are forecast to jump from 286,431 mWh in 2023 to 315,177 mWh driven by increases in all GB Power’s major customer categories - residential, commercial and general service/industrial.

Among the key investments that the tariff increase will finance are a $3m expansion of GB Power’s sub-station three next year, which the utility touted will “ensure system reliability in a critical area that is experiencing growth”.

What was termed “major maintenance” at GB Power’s generation plants, worth $2.8m in 2025 and $2.6m in 2027, is required “to ensure plant reliability and availability”, while a collective $9m investment in battery energy storage systems (BESS) is needed to support the utility’s solar power drive.

“These investments increase the availability of solar power to days and times when power is required, and the solar projects are not able to produce due to weather and/or time of day issues,” it was stated.

GB Power plans to make some $13.5m worth of capital investments in 2025, followed by $16.3m in 2026 and $22.9m in 2027. That totals $52.7m across the three years covered by the present tariff proposal, with a further $11.9m and $12m planned for 2028 and 2029, respectively.