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Freeport Utilities Regulation Dispute ‘Back At Forefront’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The long-running dispute over who has regulatory authority for Freeport’s utilities is “coming to the forefront” again, URCA’s chief executive yesterday hoping negotiation will resolve differences with Cable Bahamas and GB Power Company.

Stephen Bereaux told Tribune Business that both communications and energy providers, and the regulator itself, needed “a clear and consistent position across all sectors” as to whether URCA or the Grand Bahama Port Authority (GBPA) holds supervisory responsibility.

In the absence of any Supreme Court ruling on the issue, Mr Bereaux said the Utilities Regulation and Competition Authority “has to assume” the authority and responsibility is its own.

He added that URCA was merely following the Communications Act, which mandated that it regulate the sector throughout the Bahamas - with no exemption or ‘carve out’ provided for Freeport.

URCA’s stance, though, conflicts with that of both Cable Bahamas and GB Power Company. They are arguing that Freeport’s founding treaty, the Hawksbill Creek Agreement, effectively usurps URCA’s statutes and makes the GBPA their primary regulator within the Port area.

Mr Bereaux was speaking after URCA’s 2016 financial statements revealed that more than 50 per cent of its $895,092 accounts receivables were fees it claims are owed by BISX-listed Cable Bahamas.

These are fees URCA believes should be levied on the revenues generated by Cable Bahamas’ Freeport subsidiary, Cable Freeport, but the communications provider is disputing this.

Setting out their dispute, URCA’s financial statements state: “Included in account receivables is $448,245 due from Cable Bahamas for fees billed for the years 2009, 2010, 2011 and 2012.

“These fees have been calculated on revenue generated for Cable Bahamas’ operations in Freeport. Cable Bahamas has maintained that based on provisions of the Hawksbill Creek Agreement, the Authority [URCA] does not have the legal basis to license its operations in the Freeport area.

“The Authority, however, believes that Cable Bahamas is in breach of Parts IV and XVI of the Communications Act, and as such has pursued regulatory measures against Cable Bahamas with the view to resolve this matter.”

Anthony Butler, Cable Bahamas’ president and chief executive, did not return Tribune Business phone calls seeking comment before press time last night.

When asked about the “regulatory measures” URCA is pursuing against Cable Bahamas, Mr Bereaux replied: “At this stage, we are in the preliminary determination phase.

“We have issued a preliminary determination, and will probably be issuing a further preliminary determination subject to further discussions.”

Mr Bereaux said URCA’s ‘preliminary determination’ dealt with the “non-payment of fees” on Cable Bahamas’ Freeport earnings, and acknowledged that the regulatory issue had vexed all sides for years.

“It’s been a difficult issue for all parties for years,” he told Tribune Business. “It is coming to the forefront, as URCA’s regulatory authority in Freeport needs to be made clear.

“We are regulating Cable Bahamas in Freeport. We are doing it on a day-to-day basis, and the question of fairness to other operators has to be addressed. We also have to resolve the same issues with the electricity sector.

“We do need a clear and consistent position across all sectors. We are in discussions with Cable Bahamas, and all concerned, including the Government, to ensure there is a clear and consistent way forward,” Mr Bereaux continued.

“URCA’s role is not to force itself, but to ensure there is a clear and consistent position across the board.”

Cable Bahamas previously won a 2011 Supreme Court verdict against fees demanded by URCA’s predecessor, the Public Utilities Commission (PUC), on the grounds that the regulator had no jurisdiction to regulate the city’s communications industry.

Cable Bahamas (and Cable Freeport) won their case on the basis that the former Telecommunications Act permitted the then-PUC to levy fees only on its licensees. Cable Freeport, of course, did not fall into that category because it was a GBPA licensee.

However, then-Justice Hartman Longley declined to rule on the wider issues - whether the PUC, and by extension URCA, had jurisdiction in Freeport, and whether Cable Freeport should be licensed by URCA.

These are the issues all sides are grappling with now, and Mr Bereaux told Tribune Business: “URCA’s assumption has to be that it has the regulatory authority.

“Without a competent tribunal [the courts] making a clear decision, URCA cannot take the view that the Communications Act does not include Freeport. It says it applies to the whole Bahamas. Freeport is in the Bahamas.”

Mr Bereaux added: “Cable Bahamas has its arguments, but from URCA’s perspective we are completely bound by the Act. The Act says it’s the whole Bahamas, so that’s how it must be. There’s no discussion to be had.”

He suggested that Cable Bahamas needed to take the matter before the Supreme Court for legal determination if it felt strongly about it.

Whether a national utilities regulator should have primary responsibility for Freeport, rather than the GBPA, is another variation of a theme that has plagued the Government’s relationship with the city.

The issue strikes directly at the Hawksbill Creek Agreement, the GBPA fearing that giving up regulatory responsibility in Freeport would undermine the Act/agreement that is the very basis for the city’s existence.

Justice Longley suggested in his ruling that the enactment of the Communications Act 2009 would open the door to further legal challenges by URCA, and this could still be the ultimate destination.

For GB Power Company has gone further than Cable Bahamas in adopting the same approach, initiating legal action last year to prevent URCA “from regulating, or seeking to exercise licensing and regulatory authority”, over it.

Its amended statement of claim, filed on July 7, 2016, wants the Supreme Court to declare that GB Power can carry on its business without requiring a public electricity supplier licence from URCA.

GB Power’s action is founded on the basis that, as a GBPA licensee, it is licensed and regulated by the latter via the Hawksbill Creek Agreement - and not by URCA and the Electricity Act 2015.

It is arguing that the Electricity Act’s sections 44-46, which give URCA the legal right to licence and oversee energy providers, “are inconsistent, and conflict with, the rights and privileges vested in [GB Power] and the Port Authority” by the Hawksbill Creek Agreement.

Mr Bereaux confirmed that URCA was still in talks with GB Power Company on the issue, and said: “The key takeaway is we are hopeful both matters can be brought to a satisfactory conclusion with discussions with all parties involved - Cable Bahamas, GB Power, URCA, the GBPA and the Government.”

Implying that the Government and the GBPA were the key players, he added: “The question of URCA being the regulator for the utilities sector in Freeport, and how we do that in the context of the law, is what needs to be determined. We’re trying to bring it to an end.”

Comments

Gotoutintime 2 years, 3 months ago

The Hawksbill Creek Act died in 1967!

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The_Oracle 2 years, 3 months ago

No, but Government has been trying to kill it since 1967! Can't even get that right, thankfully. However, with various and sundry Political leader and civil servants taking personal grudges it is no wonder the "Magic" is gone. Eroded by Port ownership laying politics, and politicians bought and owned in the typical 5 year cycle. Coupled with incompetent and absent ownership, renewed government interference in spite of being smacked by the courts on numerous occasions, the pressure to collapse builds. What is it about "hands off" that drives these Government people so bats? Like a child told not to touch the Vase on the table, they get fixated and driven to defy and destroy.

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