The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama Power Company is aiming to “defer” a $15 million investment in new generation capacity by being “creative” on energy efficiency and how it uses existing assets.

Paul Miller, the utility provider’s managing director, told Tribune Business the expansion plans of several major Freeport industrial players would drive much-needed energy growth for the first time in nearly a decade.

This, he added, would typically require Grand Bahama Power to invest in new generation capacity to meet the increased demand before its proposed new three-year tariff plan expired in 2018.

Mr MIller, though, said the monopoly energy provider aimed to delay further investment in generation capacity beyond that year, using a combination of its new tariff plan, better use of existing plant and a range of energy conservation measures.

With the $250 million Phase V expansion at the Freeport Container Port, and a $100 million project to add new facilities at Pharmachem, both moving close to fruition, Mr Miller said Grand Bahama Power would finally enjoy “long overdue” energy growth.

“There are expansions that are well into the design proposal phase,” he told Tribune Business in a recent interview, “and if the schedules continue as expected, that represents some strong growth. Energy growth in Freeport is long overdue.”

Mr Miller explained that the increased energy volumes demanded by Freeport’s expanding industrials would ultimately result in lower unit costs for all consumers, due to the greater electricity supply coming from Grand Bahama Power.

Emphasising that the utility worked very closely with the industrial sector, he added: “The expansion plans are forecast to start next year.

“The actual time period when we would see the increased load is early to mid-2017. We hope it continues, we hope their plans will come to fruition, as we will all derive a benefit.”

This, though, threatens to create ‘a nice problem’ for Grand Bahama Power in terms of having to invest in increased generation capacity to meet the greater load demand.

“If these expansion plans take place in the 2017-2018 horizon, our strategy requires a new generator on the ground before the end of 2018. At $15 million, that’s a big cost,” Mr Miller told Tribune Business.

“By us being creative in how we use the existing generation on the ground, or being creative in energy efficiency and conservation, this defers the requirement to invest in new generation.

“We can avoid it using these new rates, utilising the generation we already have, and LED lights, efficiency and conservation methods.”

Tribune Business previously revealed that Grand Bahama Power wants to replace 10,000 street lights with Light Emitting Diodes (LED) lighting before the end of 2016.

“The sooner we get that done, the sooner we realise fuel savings, and that has a ripple effect. It means we run our diesel engines less,” Mr Miller had told Tribune Business. “That’s a big plus.”

He added that LED lights consumed 60-70 per cent less energy than normal street lights, and enjoyed “a very small failure rate” of less than 1 per cent.

“The maintenance is almost eliminated; the light is designed to last 12-20 years,” Mr Miller said, compared to the four-five year lifespan enjoyed by regular lights.

The Grand Bahama Power chief, meanwhile, described as “a myth” the notion that all its industrial and large commercial clients were receiving “a discount” under the new 2016-2018 tariff proposal.

“There’s a new tariff being introduced here,” Mr Miller said of the utility’s large commercial customers. “The myth is that all industrials qualify for that rate, and why are we giving small commercial guys an increase in the base rate?

“The new rate is designed either for existing customers or new customers that have opened and meet generation criteria of a certain size.”

Disclosing that Grand Bahama Power planned for a 10-year time horizon, Mr Miller said the 2016-2018 tariff proposal was helping to provide a platform for the island’s energy sector to “join the 21st century”.

“We’re laying the foundations for a business whose future as far as the energy sector is concerned is evolving,” he told Tribune Business.

“We’re very much in a changing environment here if we want to join the 21st century and become less dependent on fossil fuels to produce electricity.”