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Bec’S $56m ‘Disadvantage’ Fear Over Injunction Bid

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BEC has warned that New Providence will suffer “severe economic and social consequences” if activists succeed in obtaining an injunction against the power plant supplying 50 per cent of its energy needs.

Senior executives are alleging that should the Coalition to Protect Clifton Bay’s application succeed, it would negate the $56 million per year “advantage” BEC gains from using Clifton Pier as the main power plant for meeting Nassau’s demands.

Shevonn Cambridge, BEC’s deputy general manager with responsibility for New Providence, alleged that the Coalition’s application to the Supreme Court threatened to impede both its operations and ongoing environmental protection efforts.

His April 15, 2016, affidavit branded the environmental activists’ claims that BEC and the Government were failing to take adequate action over oil pollution in the nearby sea and surrounding environment as “simply wrong and unsubstantiated”.

The Coalition’s injunction bid, part of a wider Judicial Review action, seeks a Supreme Court Order to prevent BEC (or its new Bahamas Power & Light (BPL) subsidiary) from any ‘indirect’ discharge of oil pollution into the sea.

Mr Cambridge, though, argues that it is impossible “to achieve a complete prevention” of such discharges.

And should the Supreme Court grant the Coalition’s wishes, it would cause “a near-shut down” of BEC’s fuel distribution systems, disrupting “if not ceasing” the supply of electricity to New Providence residents and businesses.

“It has to be borne in mind that Clifton Pier Power Station provides essential electricity generation service for approximately 50 per cent of the island of New Providence and Paradise Island,” Mr Cambridge alleged.

“Any reduction in this capacity by the imposition of onerous or impossible conditions would have a tremendous negative impact on the entire country’s government services, industries, businesses and residential customers, with severe economic and social consequences....

“I am concerned that any injunction granted against BEC in respect of the Clifton Pier Power Station will have the affect of preventing BEC from fulfilling its statutory mandate to provide an economical supply of electricity to its industry, commercial and residential customers.”

Mr Cambridge disclosed that BEC favoured using Clifton Pier over its second New Providence power plant, Blue Hills, due to the fuel savings obtained via its use of heavy fuel oil (HFO).

As a result, the energy utility treated Clifton Pier as its so-called ‘base load’ plant because it was able to generate more reliable electricity and consistently meet customer needs.

With Clifton Pier incurring the “lowest net cost of generation”, Mr Cambridge added: “In dollar terms, at current fuel prices, Clifton Pier Power Station’s generation provides a $56 million per annum advantage and savings over the technology utilised at the Blue Hills Power Station.

“Therefore, any measures or Orders that might interfere with or impede Clifton Pier Power Station’s operations will have significant economic impact for the Corporation, and negatively affect the public interest.”

The Coalition’s injunction application is part of a Judicial Review application, which it has already obtained Supreme Court permission to bring, against BEC and three Cabinet ministers for allegedly breaching their legal duties to clean up - and deal with - its pollution at Clifton Bay.

The Cabinet ministers named as respondents are Deputy Prime Minister Philip Davis, as minister of works with responsibility for BEC; Kenred Dorsett, minister of the environment and housing; Allyson Maynard-Gibson, the attorney general; and Melony McKenzie, director of environmental health services.

The southwestern New Providence area, where Clifton Pier is located, is home to numerous high-end luxury communities and developments, plus businesses.

Among those affected by Clifton pollution in the past have been the Albany development and its clients, particularly its marina, and the likes of Stuart Cove’s diving operation.

The dive industry, which is estimated to have a $70 million-plus annual economic impact, has many of its best and most spectacular dive sites located in the waters near Clifton Pier.

Mr Cambridge, though, warned that the Coalition’s demands for an injunction to prevent the ‘indirect’ discharge of oil-related pollutants from Clifton Pier into the sea, disposal wells and storm water drains was impossible to implement in practice.

Implying that there was a ‘trade-off’ between this and meeting New Providence’s energy needs, the BEC executive reiterated there would be “adverse and disruptive consequences” should the Supreme Court grant what the Coalition is seeking.

“Clifton Pier Power Station is the main fuel storage facility and fuel distribution hub for the entire BEC/BPL operations throughout the Bahamas,” Mr Cambridge alleged. “Fuel stored at Clifton Pier Power Station is also used for the other operating plant in New Providence, the Blue Hills Power Station.

“Essentially, to achieve a complete prevention of ‘indirect’ discharges which, in any event, is not achievable having regard to the age and state of some of the distribution and storage systems, would require a near shut down of the fuel system distribution at Clifton Pier Power Station, and disruption - if not cessation - of some operations.”

Mr Cambridge added that Clifton Pier’s cooling wells inevitably “extract contaminants from the ground” when used, but BEC’s generation engines could not be operated without them.

BEC’s two New Providence power plants supply around 65,000 business and residential customers on the island, with Clifton Pier employing slow-speed diesel generators to generate 11 kilovolts (kV) of electricity.

Mr Cambridge said this was then increased to 33 kV, and then 132 kV, via BEC/BPL’s transformers and sub-stations.

But despite being more economical to operate, he added that Clifton Pier Power Station’s total generation capacity - 174 Mega Watts (MW) - is less than the 181.3 MW that Blue Hills can produce at maximum capacity.

“The annual maximum demand or peak load for New Providence is approximately 245 MW,” Mr Cambridge alleged. “Therefore, capacity contributions from both stations are required to satisfactorily service the said demand and fulfill the Corporation’s statutory duty to provide an economical supply of electricity.”

Prior to the recent oil price crash, many Bahamians - especially many of the 5,000-6,000 customers with the power turned off for non-payment - will have been questioning whether BEC was meeting that legal duty.

And, given that BEC’s total New Providence generation capacity is more than 355 MW, some will also query why power outages are so frequent - given that capacity is seemingly more than 100 MW higher than the peak demand cited by Mr Cambridge.

The answer likely lies in the $20-$30 million average annual losses that BEC has consistently incurred since 2007-2008, which have forced it to forego or delay essential maintenance overhauls on its generation equipment and overall infrastructure.

With generation units either off-line for servicing or poorly maintained, BEC’s New Providence generation capacity has been well-below the maximum, creating particular difficulties at peak demand time.

Tribune Business previously revealed how BEC’s environmental liabilities prompted major revisions to the management contract with PowerSecure for Bahamas Power & Light (BPL), BEC’s new operating subsidiary.

Sources with knowledge of the contract talks, speaking on condition of anonymity, said there had been a divide between the two sides over dealing with BEC’s legacy pollution issues.

These obligations, and PowerSecure’s role in tackling them, were said by contacts to be a key reason why the BPL management contract took so long to be finalised.

One source, requesting anonymity because they were not authorised to speak to the media, said the Government and BPL Board had wanted PowerSecure to complete environmental studies of all BEC sites within six months of assuming managerial responsibility in February 2016.

They added that this was an aggressive timeline, based on the number of sites - and amount of data - that had to be collected.

Comments

asiseeit 2 years, 6 months ago

The chickens are starting to come home to roost and The Bahamas is going to reap what it has sown, POOR LEADERSHIP AND CORRUPT GOVERNMENT. We are in for some very hard times, buckle up!

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ThisIsOurs 2 years, 6 months ago

This is a ridiculous response. ~"We're just letting you know that if they stop us from POISONING you and the waters, there will be severe consequences". Stop it. Just fix it. Why don't we have solar panels on the majority if not every house?

Is that BEC bribe trial still going on? Ask him what to do now.

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proudloudandfnm 2 years, 6 months ago

Wow. This is just pathetic. BEC needs to stop lying about this spill now.

Obviously they are not doing a damned thing about it.

They do need to be ordered to do the right thing.

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Economist 2 years, 6 months ago

Bring in some 5 or 10 megawatt portable generators to fill the gap. Next time keep it clean. Anyone who knows anything about fuel knows that it is BEC who is the guilty party.

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