The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Government is being urged not to renew Grand Bahama Power Company’s East and West End supply agreements, an advocacy group head arguing there is a Bahamian group that can replace it at 35 per cent lower costs.

Pastor Eddie Victor, the Coalition of Concerned Citizens’ president, told Tribune Business that the proposal by a group of Bahamian engineers - who he declined to identify - was “not pie in the sky”.

Emphasising that both this group and the Coalition had done the necessary research to make their case, Pastor Victor said they were due to meet with Kwasi Thompson, minister of state for Grand Bahama, at 10am today to push the plan.

Pastor Victor revealed that the Coalition had written to Prime Minister Dr Hubert Minnis on May 29, urging the Government not to renew GB Power’s 25-year agreements to supply electricity to Grand Bahama’s East and West Ends, which expire on June 23 and August 31 of next year, respectively.

“We believe that this represents a critical point to introduce new and additional energy companies to stimulate competition and more efficiency for consumers on Grand Bahama,” Pastor Victor told Dr Minnis in that letter.

However, many believe that Bahamas Power & Light (BPL), let alone GB Power, tends towards a ‘natural monopoly’ given that the size of the consumer market makes direct utility-scale competition non-viable.

This was asserted by Emera, GB Power’s 80.37 per cent majority shareholder, when it told Tribune Business that “economies of scale” meant renewal of the East and West End supply agreements was the natural choice.

“We remain committed to providing power for the entire island of Grand Bahama, and we believe that a single service provider offers economies of scale that benefit all customers,” Emera said.

Not surprisingly, Pastor Victor, a long-time GB Power and Emera critic, vehemently disagreed. “We’re going to be advocating that a Bahamian company supply power to East and West End, and this company will bring down prices by 35 per cent,” he told Tribune Business.

“We’ll have lower rates in force in the east and west, and Freeport will be higher... We have a Bahamian company, made up of Bahamian engineers, that’s ready to build plants to supply the east and west. All they need to be given is a license and opportunity to do it.

“What we’re going to come face to face with is: Is the Government going to allow a Bahamian company to deliver power to the Bahamian people? That’s what we will come face to face with, and that’s what we’ll be dealing with on Monday [today] when we meet with the Minister of State in the Prime Minister’s Office.”

Pastor Victor gave few specifics on the Bahamian group and its proposal, but questioned whether the East and West End supply agreements in their entirety had been complied with. In particular, he pointed to a clause that appears to tie electricity prices to inflation via the Consumer Price Index (CPI), with any increases in excess of this requiring approval from the Cabinet Minister responsible for electricity.

“That’s where URCA comes in,” he told Tribune Business. “The regulatory function vested in the Minister is now vested in URCA.” However, as revealed by Tribune Business, GB Power has initiated a Judicial Review challenging the Utilities Regulation & Competition Authority’s (URCA) right to regulate it.

It is insisting that the Hawksbill Creek Agreement (HCA) gives the Grand Bahama Port Authority (GBPA) the responsibility of regulating it and all utilities in the Port area, although it never mentioned approval by the GBPA - or the need for it - in the list of regulators that has approved its buy-out of ICD Utilities (see other article on Page 1B).

Pastor Victor, meanwhile, argued that the Coalition’s research suggested energy costs on Grand Bahama could be reduced by 40 per cent if the monopoly utility’s equipment and operations methods were changed.

“We have done our technical research,” he told Tribune Business. “We can back it up. We know right now, at this very moment, if we change this model and its operation, the cost of power can be brought down by 40 per cent.

“We have the technical data; we can prove it. This is not pie in the sky. Our consultants have shown us it can be done. It means equipment changes, but it can be done. Their [GB Power and Emera’s] mode is not to bring prices down; it’s to deliver profits for their shareholders, which is contrary to the mandate of the Hawksbill Creek Agreement when it comes to the delivery of electricity services.”