The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Utilities Regulation and Competition Authority (URCA) yesterday pledged it “will use all avenues available under the law” in responding to Grand Bahama Power Company’s bid for a rate increase.

The energy sector regulator, which is already locked in a Supreme Court battle with GB Power over whether it has supervisory authority over the latter, pushed back over the Grand Bahama Port Authority’s (GBPA) confirmation that a 45-day public consultation process over the rate rise application has started by warning about potential non-compliance with the Electricity Act 2024.

“The Utilities Regulation and Competition Authority (URCA) wishes to affirm its position as the independent regulator for all public electricity suppliers in The Bahamas, as mandated by the Electricity Act 2024,” it said. 

“URCA has taken note of the recent press release from the Grand Bahama Port Authority (GBPA) concerning a public consultation process for a proposed rate increase application submitted by the Grand Bahama Power Company (GBPC). In line with its statutory mandate, URCA remains committed to ensuring that all public electricity suppliers operate in compliance with the established regulatory framework.

“Pursuant to its statutory obligations to all stakeholders, URCA will use all avenues available under the law to enforce compliance with the Electricity Act and the Natural Gas Act, safeguarding the interests of electricity consumers and all stakeholders across The Bahamas,” URCA added.

“We urge all stakeholders, including public electricity suppliers, to engage with URCA on matters relating to electricity regulation and tariffs, to ensure transparency and adherence to the regulatory processes designed to protect consumers.”

Juan McCartney, URCA’s corporate and consumer relations manager, told Tribune Business he was unable to comment beyond what was contained in the release, while Prime Minister Philip Davis KC declined to be drawn out on the matter.

He added, though, that the Government will “abide by the conduct of URCA” and expects the regulator to deal with any issues that arise with GB Power. “I think URCA has indicated what their position is on the matter, and I’ll just abide by the conduct of URCA in respect to that, so I would not interfere or say anything on that at this time,” said Mr Davis.

“I just expect URCA to deal with those issues that have come up with the power company in Grand Bahama.” GB Power’s existing challenge to URCA’s regulatory authority in Freeport still remains before the Supreme Court after some eight years.

GB Power initially 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 original 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.

However, the new Electricity Act 2024, 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. Thus the stage for a major regulatory and legal clash has been set.

Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC) and a long-time GB Power critic, yesterday backed URCA’s intervention while hitting out at what he described as the utility’s bid to force customers - rather than its Canadian owner - to finance its multi-million dollar capital investment programme.

GB Power’s three-year tariff proposal which, if approved as is, would impose a “maximum” 4 percent increase in total electricity costs for all consumers in 2026, was also branded “crazy” by Pastor Victor due to the impact it will potentially have on consumers. He argued that if Emera, its 100 percent owner, fails to reform its business model to “a municipal concept” than it needs to “move out the way” and exit.

“The economy cannot bear this increase, the average person cannot bear this increase, businesses definitely cannot bear this increase,” Pastor Victor told Tribune Business. “The company needs to fully review their business plan for Grand Bahama and needs to change to a municipality concept of providing energy.

“Emera needs to decide if it can provide a municipality concept of power provision to Grand Bahama or not. If they cannot they need to move out the way and allow another power company to work with the concept and public-private partnership in the provision of energy. There needs to be a complete overhaul of how that company operates in Grand Bahama, and they need to change their business model.”

GB Power has unveiled a five-year, $76.6m capital investment plan. 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.

However, Pastor Victor argued that these investments should be financed from GB Power’s profits and retained earnings, or Emera, rather than consumers. “They should finance it out of their profits and the customers shouldn’t have to pay for it. Simple economics,” he said. “If you invest in a business, you should pay for capital upgrades from your profits.”