The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Businesses are waiting “with bated breath” to see if the Government’s reforms can deliver lower energy costs, with the Chamber’s chairman emphasising that implementation is key.

Gowon Bowe expressed optimism to Tribune Business that the ‘new BEC’ could ultimately reduce energy costs by 40 per cent, adding that this would “free up” funds for companies to invest in job-creating expansion.

Speaking after the Government tabled the long-awaited legislative package to reform BEC and the wider energy industry in the House of Assembly last week, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief warned against the three Bills being “shelved” - a fate that has befallen other reform initiatives.

Describing the three Bills as “monumental pieces” of legislation, Mr Bowe said: “In some cases, businesses will tell you that their energy bills now are higher than their payroll costs.

“Most people make the comment that paying electricity is almost like a second mortgage. From that perspective of fledgling businesses and new businesses, a huge burden is utility costs, with energy being the main one.

“There’s a lot of anticipation and bated breath in terms of getting energy costs down to manageable levels, so that the cost does not become a deterring factor in expanding your business,” the Chamber chair added.

“Right now, businesses have to make a determination, because costs are so high, between closing down and the equipment necessary day-to-day to retain business.’

Deputy Prime Minister Philip Davis has also previously suggested the Government is looking to PowerSecure International, the preferred management partner, to reduce the ‘new BEC’s’ electricity costs by 40 per cent.

Powersecure, which is in the final stages of negotiating a five-year contract to manage BEC’s new operating subsidiary, Bahamas Power & Light (BPL), and is waiting for Cabinet approval of its business plan, has been more cautious - describing a 40 per cent reduction as ‘theoretically doable’, but some way off.

Standard & Poor’s (S&P), in its full country assessment of the Bahamas last week, predicted that PowerSecure might be able to lower energy costs by 33 per cent - from around $0.45 per kilowatt hour to $0.30.

Mr Bowe, meanwhile, told Tribune Business that power costs in many Caribbean nations were around 50 per cent lower than the typical $0.40 per kilowatt hour rate levied by BEC.

He suggested that while a 50 per cent reduction might be too ambitious, a price of $0.25-$0.26 per kilowatt hour was achievable.

Should PowerSecure and BPL reach that goal, Mr Bowe added: “It frees up investment dollars. It allows me to reinvest in my business, in the best and most efficient manner, the profits being eaten up by high energy costs.

“Businesses have to make tough decisions; what to produce, what to sell and what to deliver to the customer.”

Describing the BEC and energy reform package as potentially “a tremendous boost”, Mr Bowe told Tribune Business it was critical for all stakeholders to follow through and give practical effect to the legislation.

“What is important after that is practical implementation,” he warned. “We have seen pieces of legislation passed and shelved, and it’s important this monumental piece of legislation is moved, debated and passed to enable us as a country to bring energy costs and usage into the 21st century.”