By KHRISNA VIRGIL
Tribune Staff Reporter
DEPUTY Prime Minister Philip “Brave” Davis yesterday tabled three bills in the House of Assembly that are expected to pave the way for the Christie administration’s plan to reform the electricity sector, ultimately reducing the cost of electricity to consumers.
During the morning session of the House of Assembly, Mr Davis tabled the Electricity Bill, Utilities Regulation and Competition Authority (Amendment) Bill and the Electricity Rate Reduction Bond Bill. Mr Davis, the minister of works, has the Bahamas Electricity Corporation (BEC) in his portfolio.
The passage of these bills will facilitate further restructuring of BEC, which will be managed by American company Power Secure International.
“This solution now allows for significant and sustainable reductions in the cost of energy, a financially healthy electrical utility company, increased energy security, improved reliability of service, more responsible environmental attention, and, ultimately, increase our competitiveness and marketability as a country,” Mr Davis said. “It is a process of true reform.”
Mr Davis said the Electricity Bill, in part, facilitates the reform of the electricity sector. It also provides for the separation of regulatory and operations functions by the restructuring of BEC.
“It does this by transferring its commercial operating functions and assets to a wholly owned subsidiary company, and establishes URCA as the independent sector regulator,” Mr Davis said.
“The passage of the Electricity Bill will cause the repeal of the Electricity Act and Out Islands Electricity Act respectively and provide for diversification in the generation, supply, and distribution of electricity in accordance with the National Energy Policy, including through renewable energy sources; and modernise and consolidate the law relating to electrical installations,” he added.
The deputy prime minister said the new 100 per cent owned operating subsidiary, which is now called Bahamas Power and Light Company Limited (BPL), would operate under private sector management by a service provider in a manner consistent with this government’s National Energy Policy.
BPL was incorporated in September and its board of directors was appointed shortly after with Nathaniel Beneby as chairman.
Mr Davis also said that the Utilities Regulation and Competition Authority (Amendment) Bill proposes changes in anticipation of the legislation that will establish URCA as the independent regulator of the electricity sector. It will also enable and facilitate URCA in discharging such regulatory function in the new electricity supply regime.
Mr Davis said URCA’s primary responsibilities under the new Electricity Bill would be to review and approve electricity tariff rates charged to the consumer; review the need for additional electricity generation by independent power producers; and establish rules and approve competitive processes where applicable for procurement of power generation resources conducted by BPL, or any other public electricity supplier.
Other responsibilities include ensuring the efficient operation of the electricity supply system in accordance with applicable regulations; reviewing and granting applications for public electricity supplier licences and issue licences and collect fees from all licensees and public electricity suppliers sufficient to cover the cost of the regulation of the sector; promotion and approval of energy efficiency programmes among other things.
The legislation further anticipates that BPL and the Grand Bahama Power Company (GBPC) will be the initial licensees, with GBPC serving the port area as defined under the Hawksbill Creek Agreement and BPL serving BEC’s current area of supply across the Bahamas.
It will also require public electricity suppliers to submit renewable electricity plans, facilitate renewable energy self-generation projects, and regular review and approval of the plan by URCA.
Mr Davis said the Electricity Rate and Reduction Bond Bill would provide the legal framework and infrastructure to enable the issuance of such bonds.
He said: “The purpose of the bonds is to generate proceeds to be used for the payment and satisfaction of specified debts of the corporation and BPL; and to fund the electricity sector reform and restructuring of the corporation, including the establishment and initial operations of BPL.
“This reform and restructuring process is intended as part of the overall plan to eventually reduce electricity charges to the consumer.
“With the RRB financing, the corporation will be able to pay toward the elimination of its financial liabilities of the corporation, including bank debts, bonds and other non-current financial liabilities outstanding on the date the Electricity Act comes into operation.”
He said it will also allow for the payment of pension and other benefits and rights vested in employees or former employees of the corporation on the date the Electricity Act comes into operation.
The rate reduction bonds are expected to pay initial costs of environmental remediation, not exceeding the sum of $20m inclusive of ancillary and associated costs, as determined by the government, Mr Davis said.
Parliamentarians are expected to begin debate on the legislation on November 23.