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Gbpa ‘Exposed’ To Legal Challenge On Power Rate Process

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) was yesterday warned it is “exposing” itself to potential legal challenge by allowing just a nine-day public consultation over the island’s proposed electricity rates for the next three years.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the GBPA was “making a mockery of consultation” by giving Freeport residents such a short timeframe in which to respond to the Grand Bahama Power Company’s (GBPC) complex proposal.

Calling on Freeport’s quasi-governmental authority to start again with a new process, Mr Smith urged it to learn from the Government’s failings and “put all the cards on the table” for residents and businesses to see when it came to GBPC’s plan.

He added that the GBPA needed “to play ball with the people of Freeport”, otherwise its regulatory powers could be exposed to Judicial Review proceedings seeking to challenge the inadequate consultation process.

Despite the GBPC’s 2016-2018 tariff proposal being submitted to the Port Authority, as regulator, back in August, the latter only published a summary of the plans - via the Internet and newspapers - on last Wednesday, November 25.

Freeport residents and businesses were given until today - just nine days - to review and provide feedback on complex commercial proposals, to which no less than eight studies and reports are attached.

These could only be viewed at the GBPA’s ‘pink building’ headquarters “by appointment only”, and just during working hours, but appear integral to the Power Company’s proposals.

The studies include an ‘Investment Review Plan (IRP)’, which assesses future customer demand against GBPC’s current generation capacity, allowing it to develop a five-year capital investment plan.

Other reports include a ‘Cost of Service Study’ (COSS), which measures reflects how GBPC’s actual costs are allocated to serving different classes of customers; a depreciation analysis; capital structure assessment; hurricane vulnerability review; performance and revenue plans.

Applauding the GBPA for launching what he believed to be its first public consultation, Mr Smith nevertheless told Tribune Business: “I have to say that a nine-day consultation process is completely unsatisfactory. It is unacceptable, and makes a mockery of consultation.

“This is, I believe, one of the first public consultation processes undertaken by the Port Authority, and I urge them to step back, revisit this and embark on a new and proper consultation process.

“The people of Freeport are entitled to have an opportunity to make an informed contribution to the process, and given that this is the first occasion where there will be a public consultation on rates, it is puerile to give only nine days for the public.”

The GBPA, in the summary of the GBPC tariff proposal posted on its website, argued that “extensive consultation” on the new electricity rates - but only with select, unnamed “stakeholders”.

“Extensive consultation with various stakeholders was undertaken, and the feedback is reflected in the final proposal,” the GBPA said, before inviting Freeport residents to provide “any and all comments, questions or concerns” to it by today.

The “stakeholders” referred to in the GBPA’s comments are likely to be Freeport’s major businesses and industrial concerns, such as Polymers International and PharmaChem Technologies, which have long complained that GBPC’s relatively high energy costs have undermined their competitiveness and prevented investment in job-creating expansion.

They will have a ‘brand new’ tariff classification created just for them under GBPC’s 2016-2018 rate proposal and, apart from low income and low energy users, are the only GBPC customers who will see a decline in their ‘base rate’ - of 8.5 per cent across the board.

This has already raised concerns that GBPC is shifting the ‘base rate’ burden from the large industrials to small and medium-sized businesses, plus middle class residential clients.

One well-known Grand Bahama resident, who posts to The Tribune’s website as ‘The Oracle’, said of the GBPC rate proposal: “Seems they’ll give the industrials a cut rate by putting it on to the other commercial customers.

“Might be a lawsuit on that one; discriminatory practices ought not be. Middle class residential rate is going up to offset a lower residential base rate. Like a game of cups, everyone loses.”

Meanwhile, Mr Smith, a veteran of several successful Judicial Review challenges over so-called ‘inadequate public consultation processes’, most notably in the BEC Wilson City power plant case, called on the GBPA to “give appropriate time periods” for consultation over the new electricity rates.

“Otherwise they will be exposed to potential Judicial Review challenging the exercise of their regulatory powers,” he told Tribune Business.

“Just as the Government has recognised they should put all their cards on the table and publish the McKinsey report [which it has yet to do], the Port Authority should not fall into the same bad habits of PLP and FNM governments with being secretive.

“I invite the Port Authority to play ball with the people of Freeport, put all their cards on the table and give people a good faith opportunity to participate.”

Mr Smith said he planned to attend, and participate in, last night’s Town Meeting held by Pastor Eddie Victor and the Concerned Citizens Coalition (CCC), which was called to discuss the new tariffs.

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.

“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.”

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