The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama residents have been given just nine days to respond to a complex proposal that aims to set electricity rates for the next three years, including an 8.5 per cent reduction in the ‘base rate’ for large industrial companies.

The Grand Bahama Port Authority (GBPA), the utility regulator for the Port area, finally published a summary of the island’s proposed 2016-2018 electricity tariffs on November 25, but has given consumers until tomorrow - December 4 - to respond.

The narrow consultation timeframe of just nine days will likely fuel suspicions among the likes of the Coalition for Concerned Citizens (CCC), which has been lobbying for a reduction in Grand Bahama’s electricity costs, that the process may now just be a ‘rubber stamp’ for decisions that the GBPA has already taken.

The summary of the Grand Bahama Power Company’s (GBPC) 2016-2018 rate submission promises that 90 per cent of customers will see no rise in total energy costs over the three-year period.

It is essentially proposing a small increase in the ‘base rate’, the portion of the electricity bill that generates all GBPC’s cash flow and profits, for most customer classes. However, this will be offset by a corresponding decline in fuel costs, which are assessed as a pass through to the consumer.

To protect low income consumers and minimal energy users, the GBPC proposal recommends a 4.5 per cent ‘base rate’ reduction for the first 350 Kilowatt Hours (kWh) used by all customers.

“Sixty per cent of residential customers will see no increase to the base tariff, and 85 per cent of residential customers will see a decrease to the ‘all-in’ price of electricity (which includes fuel and base rate) when compared to the average ‘all-in’ price for electricity in 2015,” the GBPC submission said.

“With the proposed tariff structure for the residential class, 85 per cent of GBPC’s customers, who are customers consuming less than 800 kWh monthly, will see their total (all-in) bill decrease by $5-9 per month.

“Residential customers who consume more than 2,000 kWh (and account for 13 per cent of GBPC customers), will see their total (all-in) bill increase by $5-10 per month, depending on usage amounts. One hundred per cent of commercial customers will see their total (All-in) bill amount decrease by up to 1 per cent.”

The only other customer category set to enjoy a ‘base rate’ decrease is Freeport’s large industrial concerns, the likes of Polymers International and PharmaChem, who will see an 8.5 per cent decline at all consumption levels. They will have a ‘brand new’ tariff classification created just for them.

As for other Grand Bahama businesses, the GBPC proposal says: “Commercial and general service large customers should expect a slight increase in the base tariff at approximately 3.6 per cent.

“However, these customers actually see an average decrease of 1 per cent or less to their ‘all-in’ price of electricity (including fuel and base rate) when compared to the average ‘all-in’ price for electricity in 2015.”

Elsewhere, the GBPC’s proposal seeks average base revenue per annum of $71.2 million over the 2016-2018 period, which is down some $600,000 from 2014.

And it is also seeking reduced rate of return on its base rate - from 10 per cent to 8.8 per cent.

Another key component is the introduction of a Hurricane Self-Insurance Fund, which will add a $0.03 per kWh charge to GBPC’s tariff, with the revenues raised set aside so it can finance post-storm repairs.

“This is a proactive approach to begin to provide rate protection for customers from an immediate tariff increase if a hurricane causes significant damage. The charge will be $0.003 per kWh that would go into effect January 2017, and collect about $1 million per year,” the GBPC said.