By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Hard-pressed Grand Bahama residents will have a collective $3 million returned to them as a result of their energy provider’s revised tariff structure, Tribune Business was told yesterday.
Paul Miller, Grand Bahama Power Company’s (GBPC) managing director, told Tribune Business that the adjustments made to the company’s 2016-2018 rate proposal, which was approved earlier this week, represented a “win-win” for its roughly 19,000 customers.
He added that the energy monopoly, in tandem with the Grand Bahama Port Authority (GBPA) and its consultants, had developed “creative ways” to revise the initial proposal so that all clients would see their light bills decrease by between 7-12 per cent over the next three years.
Mr Miller expressed hope that these reductions would act as an economic “stimulus”, with companies able to reinvest the “significant” savings into their business and increase profits.
And, to bolster energy efficiency, Mr Miller said GB Power planned to introduce Advanced Metering Infrastructure (AMI) during the 2016 second half, an initiative that will ultimately lead to the replacement of all client meters over the following two years.
“We’ve very pleased with the outcome,” Mr Miller said of the GBPA’s approval for its revised tariff structure. “We know it creates a win-win for customers. The consultation process was good for us, good for the Port Authority and good for the customers.”
The GBPA extended the consultation process by four weeks until January 15, 2016, to give Grand Bahama residents time to study the energy provider’s proposal and provided considered feedback.
“That was able to be taken into consideration as went back to the table to reflect on the initial proposal,” Mr Miller added, explaining how GB Power’s submission was revised.
“Working with the consultant the Port Authority had, we were able to come up with creative ways to make it quite a small base rate increase which, when you couple that with the fuel charge, ended up producing a 7-12 per cent decrease [in total light bills] for customers across the island.
“I think it’s fantastic, and our customers can start to realise those savings with that approach. Based on how the rate structure is, low income residents will see the greatest benefit.”
GB Power’s approved rate structure addresses concerns over the initial proposal, which called for a small ‘base rate’ increase for most customer classes.
This was to be offset by a corresponding decline in fuel costs, which are assessed as a pass through to the consumer. The net effect, according to the initial submission, was that 90 per cent of customers would 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 first GBPC submission said.
Despite the promised reduction in total electricity costs for Grand Bahama’s middle class and low income consumers, criticism focused on the ‘base rate’ increase for all but the smallest energy users and the island’s major industrial concerns.
As a result, the GB Power application was subsequently modified, so that the approved version now pledges that “all customers” will see their light bills decrease by between 7-12 per cent.
“We are pleased to advise that the proposed average base rate increase has been reduced from 3.5 per cent to 1.5 per cent,” the GBPA said in announcing the approval, “with 90 per cent of residential customers seeing a decrease in their base rate, which contributes to the increased savings on the total power bill.
“The greatest savings will be seen by low income residents, with both a base and all-in decrease totalling a 12 per cent savings. Residential customers will see annual savings amount to between $150 and $500, depending on consumption.”
This effectively translates into a return of income, however minor, from GB Power to its customers.
“Ultimately, there’s another $3 million in savings in residential alone when you look across the entire residential group,” Mr Miller told Tribune Business of the revised proposal’s impact.
“Back in December, we were looking at an ‘all-in’ decrease, and now we’ve been able to expand that to all around, the all-in reduction, and expand the number of customers seeing a base rate decrease to 90 per cent.”
The GB Power principal said the utility had also “heard the cries” from the island’s private sector, hence the projected 8 per cent and 9 per cent decrease in total electricity costs for the island’s commercial and ‘general large service’ customers, respectively.
“I’m hopeful that the savings generated for them on a monthly and annual basis are monies they can put back into their businesses, which allows them to be more profitable and more successful,” Mr Miller told Tribune Business.
“Hopefully, this will be a stimulus. The general large service customers, their decrease will get into the 9 per cent range. It represents what I consider significant savings for those customers.”
Mr Miller also expressed optimism that GB Power’s new rate structure would encourage the likes of PharmaChem and the Freeport Container Port to proceed with their multi-million dollar expansion plans.
“That will drive growth in Grand Bahama, that will drive jobs, and that is a win for every resident, which is good for utilities and good for Grand Bahama in the long-term,” he added.
“Going forward, that becomes an economic growth engine for the island, and we feel hopeful we’ve contributed to their cause and helped them be more successful.”
Mr Miller, meanwhile, said GB Power would tackle energy efficiency through the planned roll-out of its AMI metering technology.
“Our goal is to introduce this initiative towards the end of this year, the third or fourth quarter,” he told Tribune Business, “if approved. That sets the stage for 2017 and 2018, and a change of all customer meters.”
Mr Miller said this would lead into “remote controls and energy management”, and give GB Power customers greater control and understanding over their energy consumption patterns.
“That’s very important, because energy efficiency is a clear thrust of this filing as well,” he added. “Eliminating the waste and inefficiency impacting their bills becomes a key piece of the work we want to do with customers.”
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