By NEIL HARTNELL
Tribune Business Editor
Back-to-School retailers face being stuck with excess inventory, and lost sales opportunities, as a result of Nassau’s energy crisis, the Chamber of Commerce’s top executive warned yesterday.
Jeffrey Beckles told Tribune Business that Bahamas Power & Light’s (BPL) ongoing woes are disrupting the second busiest shopping season of the year for many retailers, with the corresponding drop in sales and profits leaving many with reduced financial resources to carry them through the quieter months until Christmas.
Revealing that the chamber had yesterday made several proposals to the government on how it could tackle BPL’s immediate generation shortfall, Mr Beckles said the private sector was desperately seeking “any signs of hope they can hold on to” that the frequent three-four hour load shedding and blackouts will soon becomes history.
He described the situation as “treacherous” for many in the business community, especially those lacking back-up generator power supply, and said consumers as well as businesses needed to know that BPL will be able to maintain its existing assets until the 132 megawatts (MW) in new generation capacity comes online.
“Nothing else matters right now,” Mr Beckles told this newspaper of BPL’s woes. “The business community is taking it on the chin. The truth of the matter is it’s very hard. It’s very challenging for many businesses on all levels.
“It’s really been torturous for the business community, and the business community right now is looking for any sign of positive hope that they can hold on to. It’s not only lost revenue and damaged equipment; it’s also lost opportunity. It’s been treacherous for us. It’s across the board; whether you’re a shoemaker, renting out to Airbnb guests or a clothing store.”
The chamber chief executive added that the power outages, which are longer and more frequent than they have ever been, could not have occurred at a worse time for clothing and footwear retailers, plus the likes of seamstresses and shoe repairers, all of whom rely heavily on the current Back-to-School shopping season.
“It’s impacting all of us at Back-to-School time when inventory is high, sales expectations are very high, but you cannot run your business,” Mr Beckles told Tribune Business.
“It’s a moment in time which businesses need to capitalise on, the peak hours, and that’s right now. September is right around the corner. This is now prime season in The Bahamas.
“When it’s over people are back to school, and businesses will be stuck with inventory, damaged equipment, lost opportunities. The total value of that is extremely high and very real,” he continued.
“When you start to calculate that in real time, real money, those opportunity costs go very high. We need to be able to hold on to something, and that’s the hope a solution is right there.”
Mr Beckles added that the severity of New Providence’s energy supply shortfall, and its impact on both the private sector and general population, meant Bahamians needed to hear from the political leaders rather than BPL’s Board and management.
This has begun, belatedly, with press releases from the Prime Minister’s Office and Dr Hubert Minnis’ weekend visit to BPL’s Clifton Pier and Blue Hills power stations. The Prime Minister has conceded the situation is at “crisis” point, with several months remaining until 132 MW in new generation capacity becomes available, but no solution has yet been unveiled publicly.
Mr Beckles said the Chamber had yesterday sent a series of proposals and recommendations to the Government on how it could alleviate the present predicament, although he declined to provide details on the grounds that the Minnis administration was unlikely to have studied them yet.
“We’re going to continue to push and advocate,” he confirmed. “I think we’ve made some very valid representations to the policymakers. We know the new plant is coming on in stages, but we also need to know the existing equipment will be maintained until to prevent a repeat of these rolling black-outs.”
Whitney Heastie, BPL’s chief executive, has admitted that the utility had given itself a wafer-thin margin to meet New Providence’s 250 MW peak summer demand with only 270-280 MW of generation available.
While he argued that the extent of the failure at the Blue Hills power plant, which resulted in three generation units being lost simultaneously, could not have been predicted, Mr Heastie also admitted that some of BPL’s aged infrastructure is 60 years-old - a factor that suggested regular maintenance/repairs would be required.
Mr Heastie confessed that BPL knew it was “walking a tightrope” for summer 2019, which many observers will interpret as an admission that BPL failed to adequately plan for summer demand and all possible scenarios.
With the loss of 70 MW in generation capacity at Blue Hills, the BPL chief executive admitted that the utility only currently has 210 MW of generation capacity to meet 250 MW peak demand in the Bahamian capital.
He also admitted that BPL’s “decaying” generation fleet contains equipment more than 60 years old where parts cannot be procured and have to be obtained exclusively from manufacturers - thereby making engine breakdowns and off-line maintenance a near 100 percent certainty.
The poor state of BPL’s generation fleet is highlighted by the fact some 37.5 percent of the 280 MW summer generation capacity is comprised of rental units from Aggreko, with Mr Heastie admitting the energy monopoly is “on the edge, on the cliff” virtually every day.
Immediate solutions have so far been in precious little supply. The Government has only been able to point to nine MW in additional rental generation from Aggreko, coupled with the arrival of a specialist six-man team from Philadelphia to help restore BPL’s broken down engines, as signs of progress prior to the installation of the utility’s 132 MW from Wartsila.