The Tribune

EDITOR, The Tribune.

 In a recent letter that I had written and that was published by The Freeport News, I had wrongly stated that the Grand Bahama Port Authority Limited (GBPA) owned 20 per cent of the Grand Bahama Power Company (GBPC); and that the Canadian corporation Emera Inc owned 80 per cent. Actually, Emera owns 80.4 per cent of the local power company, according to the local power company's website. The remaining 19.6 per cent of GBPC is owned by ICDU shareholders, not the Port Authority, as I had wrongly stated in the letter. It was dead wrong of me to assert that the Port is a beneficiary of the GBPC and that it does not care about the suffering of the customers of the power company. The fact that the Port would call for an audit at the GBPC is an indication that it does care.

My humble apologies to the principals of the Port Authority and to the publisher, management and staff of The Freeport News.

 I should have done my homework and ignored the many unfounded rumours on the streets. I was guilty of not adhering to the highest standards of journalistic integrity. I also accused the power company of having one of the highest rates in the entire region. However, Emera claims that the GBPC has one of the lowest electricity rates in the Caribbean. Apparently, the power company's fuel surcharge causes its electricity bills to increase, much to the annoyance of its 19,000 consumers. According to a 2011 response that published by GBPC for its detractors who complained about the fuel surcharge: ''The fuel surcharge is 21.0316 cents. This puts us in the bottom third of 13 Caribbean CARILEC Utilities for all electricity prices. The GBPC does not burn crude oil which is the fuel price being quoted by representatives of Operation Justice. We burn #6 and #2 oil. The fuel surcharge reflects those prices.''

Interestingly, the GBPC claimed in the response that it makes no profit on the fuel surcharge. According to the written response, the fuel surcharge is a direct pass through to the customers. This means that the customers are paying for the fuel, not the GBPC. This appears to be the gripe of Troy Garvey and others. In fact, the Grand Bahamian activist likens this practice to a taxi driver charging an individual for a ride plus the gas he would have used to transport the person to his destination. They see this as double dipping. All the same, despite the best efforts of the Port Authority, the government of The Bahamas and Emera, external forces will continue to dictate the price of electricity on Grand Bahama, because of the fuel surcharge. The price of oil on the world market continues to fluctuate as it has for years. According to a Washington Post report that was published on July 27, Benchmark US crude added 74 cents on Friday to finish at $90.13 per barrel in New York. In London the price for a barrel of oil was pegged at $106.47. Unfortunately for Grand Bahamians, particularly the members of Operation Justice, the price of oil is nowhere near to what it used to be. For instance, a barrel of oil cost only $3 in 1973. It jumped to $12 by 1974, because of the embargo that Arab oil producers imposed on the West and the US for supporting Israel in the Yom Kippur War in 1973. Back then, a gallon of gas was only $0.39, amazingly. Still, Operation Justice is adamant that the fuel surcharge is wrong. I understand that the GBPC received permission from the Port Authority to add $0.03 fee to its fuel surcharge to cover cost of bringing in rental generation units. Many Grand Bahamians disagreed with the increase. That being said, it could be argued that without the fuel surcharge, the GBPC would not make a profit. In 2008 Emera purchased 25 per cent of the GBPC. In 2010 the Canadian corporation bought an additional 55.4 per cent of the power company from MaruEnergy Grand Bahama Limited for a reported $82 million, making it the majority owner.

Emera has been in the electricity business for over 120 years. GBPC (originally Freeport Power) was formed in 1964 by the GBPA as a separated company. For the first seven years of its existence, according to GBPC's website, the operations were intermingled with other activities of the Port Authority in developing Freeport. In the 1990s Southern Company purchased 50 per cent interest in the GBPC at the invitation of the GBPA. I stand to be corrected, but from what I have been able to gather, it appears that the Port Authority had owned the GBPC from the late fifties into the early nineties. In 1993 an international spin-off of Southern Company called Mirant obtained possession of 50 per cent of the GBPC. The remaining 50 per cent of shares were purchased by ICD Utilities (ICDU); which ended up selling 25 per cent of its shares to employees of Freeport Power and to the general public. In 2006 a Japanese company named Marubeni Caribbean Power Holdings Inc. purchased 55 per cent equity interest shares in the GBPC. It was an indirect subsidiary of Marubeni TAQI Caribbean, MaruEnergy Grand Bahama, which sold 55.4 of direct and indirect shares to Emera in late 2010, as I have mentioned already. GBPC currently supplies electricity to approximately 19,000 customers and is the only utility operator on Grand Bahama. As with the case of all other licensees, the Port Authority is the Regulator of the GBPC. After hearing the cries of a group calling itself Operation Justice and hundreds of frustrated Grand Bahamians, the Port decided to engage a firm called PricewaterhouseCooper, Bahamas (PwC) in order to examine the billing and metering processes of the GBPC. Again, this shows that the Port really cares about Grand Bahamians.

According to a news report by Ianthia Smith of The Bahama Journal, the independent audit that was conducted at the behest of the Port Authority revealed that there were 16 deficiencies within the GBPC's billing and metering processes. Among the 16 deficiencies listed in the audit are the following: 

1. Billing clerks deliberately applied an excessively high estimated consumption to a customer who had received consecutive estimated bills, in an attempt to get a customer who had not responded to multiple attempts to make contact, to come into office.

 . A metre testing and recertification plan has not been formally developed and documented, particularly for residential metres.

 . Billing clerks were not able to retrace their steps or demonstrate how manual estimated consumption was determined.

 . GBPC billing clerks do not receive periodic refresher training in metre reading.

 . Leaks and broken seals in many residents' electricity supply was never reported or corrected, therefore resulting in increased bills. 

1. A comprehensive set of policies and procedures which governs and guides the management and execution of the metre reading activities has not been formally developed and documented; personnel involved in the metre reading process are made aware of the policies and procedures in different ways, some of which are informal.

 . GBPC management does not perform reconciliations between the billing system and the metre reading system to verify the completeness and accuracy of the transfers.....security controls for the metre reading application were not in line with international best practice standards.

 . Inconsistencies were also found as it relates to the replacement, testing and certification of metres over its lifespan. The audit, entitled the ''Grand Bahama Power Company Meter Reading and Process Review,'' can be found on the Port Authority's website (www.gbpa.com). Both the GBPC and the Port Authority have responded to the audit. Based on the response that was given by GBPC, it looks like it feels vindicated by the findings of the audit. It now remains to be seen what will be done to bring relief to Grand Bahamians, however.

In closing, I would like to once again apologise to the GBPA and its principals. I had misrepresented them in the letter that was published in early July in The Freeport News. I take full responsibility for what I had written.

 KEVIN EVANS

 Freeport,

Grand Bahama,

July 28, 2012.