The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Attorney General yesterday asserted that findings in the $357m Grand Bahama Port Authority (GBPA) arbitration dispute could result in the “dismissal” of Supreme Court challenges to the Utilities Regulation and Competition Authority’s (URCA ) authority to supervise utilities in Freeport.

Ryan Pinder KC suggested that Grand Bahama Power Company’s battle over URCA’s ability to regulate it, and whether the Electricity Act 2024 supersedes and overrides the Hawksbill Creek Agreement, has effectively been decided after the three-strong GBPA arbitration panel found “the Government’s right to legislate” is superior to Freeport’s founding treaty.

The tribunal, chaired by Sir Anthony Smellie KC, former chief justice of the Cayman Islands, and Lord Neuberger and Dame Elizabeth Gloster, two UK law lords, rejected the GBPA’s bid for “a declaration that it was the sole regulator of the construction and operation of electricity and other utilities in the Port area”.

“However, the Tribunal held that the Government has a right to introduce legislation to apply to the construction, operation and regulation of utilities in the Port area,” Mr Pinder added. In particular, the arbitrators noted that the Hawksbill Creek Agreement provides for its provisions to be overridden by statute law passed by the Bahamas’ Parliament.

“We are of the view that the Government’s right to legislate overrides the GBPA’s rights under clause 2(21), and therefore the enactment and implementation within the Port Area of the Electricity Act 2015 and the Electricity Act 2024 did not amount to a breach of the Hawksbill Creek Agreement by the Government,” the arbitrators ruled.

Mr Pinder yesterday hailed the decision as effectively settling the ongoing Supreme Court battle over whether URCA has the right to regulate GB Power Company and other Freeport-based utilities, such as Cable Bahamas’ Cable Freeport subsidiary, which is locked in a similar legal fight with the Nassau-based supervisory authority. Both are arguing that, under the Hawksbill Creek Agreement’s terms, that the GBPA is their regulator.

“There’s an ongoing case on our courts specifically on this issue, in which the Power Company is challenging the right of URCA to regulate it. This arbitration ruling makes clear URCA has the authority to regulate utilities in Freeport. That case will be dismissed,” the Attorney General asserted.

He later added: “The Electricity Act, that was put in very specifically in that it applied to all areas of The Bahamas including the Port area. The Power Company and Port Authority they say… it is a matter between the Power Company, which has taken the position that regulation of utilities in Freeport [belongs] to the Port Authority and that the Electricity Act should not apply to utilities in the Port area because of the Hawksbill Creek Agreement.

“It has been a long-standing matter in our courts. I’m glad the arbitration panel made it very clear that the Government of The Bahamas does have the right to be able to legislate the regulatory framework in Freeport with respect to all utilities, inclusive of power.”

Dr Michael Darville, minister of health and wellness, described the arbitration decision as “joy in the morning” for utilities regulation in Freeport. He added that it affirms URCA has “a rightful place in the running of utilities on Grand Bahama, and that will bring tremendous development and change on the island”.

URCA’s action is effectively asking the Supreme Court to determine the same issue - who has regulatory authority for electricity and other utilities in Freeport - as that contained in the 2016 case filed against itself by GB Power. The latter action, though, was based on the original Electricity Act that was implemented in 2016, while URCA’s is derived from the more modern statute law passed by Parliament in 2024.

The crux of the dispute remains the same, with URCA arguing that statute law passed by Parliament in the form of the Electricity Act gives it the authority to regulate energy within Freeport. However, the GBPA has argued that Freeport’s founding treaty, the Hawksbill Creek Agreement, bestows supervisory authority for all utilities within the Port area on itself and is superior to statute law.

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 was set.

GB Power, in its still-live 2016 claim, had 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, Cable Freeport.