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Urca Fines Bpl $230k Over Fires, Blackout Stalling

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Energy sector regulators last night revealed they have fined Bahamas Power & Light (BPL) some $229,535 for failing to co-operate with investigations into its summer blackouts and Clifton Pier fires.

The Utilities Regulation and Competition Authority (URCA), in a statement issued last night, said it had found the state-owned utility monopoly in breach of its Public Electricity License and the Electricity Act for failing to act on the supervisory body’s request to supply information on these incidents.

URCA said it regarded BPL’s actions as “repeated and continuing breaches” of both the law and its licence that were “sufficiently serious to warrant the imposition” of the fine which must be paid within 30 days.

“On March 8, 2019, and July 16, 2019, URCA gave notice by letter to BPL that URCA had initiated two investigations,” the regulator explained. “The first was in reference to a significant fire at BPL’s Clifton Pier Power station on September 7, 2018. The fire caused widespread outages on New Providence and resulted in the loss of significant generation capacity.

“The second investigation concerns BPL’s announced ‘load shedding’ during summer 2019. As a result of the ‘load shedding’, BPL’s system was impacted by frequent outages in the supply of electricity to customers which has had a serious adverse impact on the public.”

It continued: “URCA, in exercise of its obligations as regulator and in accordance with section 74 of the Electricity Act, requested information from BPL to inform its deliberations. In each case BPL either failed and/or refused to provide the information requested. BPL’s failure and/or refusal has had, and continues to have, an adverse impact on URCA’s ability to carry out its regulatory functions under the Act.”

URCA added that it made its initial decision and draft Order on the matter on September 13, 2019, with the final determination taking place on Tuesday.

Dr Donovan Moxey, BPL’s chairman, last night expressed surprise that URCA had released its decision and action publicly. “I don’t have any comment, I really don’t,” he told this newspaper. “I’m not going to give any comment on that at all.”

URCA’s disclosure comes at a sensitive time for BPL as it prepares for the mammoth $650m bond issue that will refinance its legacy liabilities and enable it to undertake some $222m in critical infrastructure investments that have been oft-delayed due to its financial woes.

While the fine is effectively ‘small change’ for BPL given its nine-figure revenues, the episode again highlights the difficulties of bringing powerful state-owned monopolies to heel under an independent regulator following the transition from an environment where the utility (and the Government) were previously owner, operator and regulator.

Tribune Business revealed in August that URCA had initiated an investigation into load shedding at BPL, which admitted it was “walking a tightrope” every day to keep the power on.

Stephen Bereaux, its chief executive, told Tribune Business it had begun its probe in the middle of that month following weeks where New Providence was subjected to rolling blackouts every day because BPL did not have sufficient generation capacity to meet demand.

Disclosing that the energy sector regulator was still in “the information gathering stage”, Mr Bereaux said then that URCA was focusing on whether BPL’s inability to deliver a consistent, reliable power supply had put it in violation of both its licence terms and obligations under the Electricity Act.

Acknowledging that URCA was concerned “like everyone else in the country” over the frequency and duration of BPL’s outages, he declined to be drawn on what measures the regulator will take if it finds the state-owned utility monopoly has violated its licence and legal commitments.

“We are investigating the outages,” Mr Bereaux confirmed, “and have initiated an investigation. We started the investigation about two weeks ago after the first round of load shedding.

“The process involves collecting a lot of information, and we’re still in the information collection stage. Based on the information we receive we may end up collecting more, and then we will issue our preliminary determination.

“We’re trying to determine if BPL’s conduct is consistent with the provisions of their licence and obligations under the Electricity Act.”

Mr Bereaux said URCA would “issue a determination” on its findings “as and when appropriate”, and declined to comment on both the likely investigation timeline and potential punishments - such as fines - that would result if the outcome proved adverse to BPL.

“There’s nothing pejorative at this stage,” he explained. “We would have, like everyone else in the country, concern with the frequency and duration of outages. It’s our role to ensure they [BPL] operate as required by the Electricity Act and licence granted by URCA.

“URCA’s job is to put rules and regulations in place, and ensure BPL complies with those. Our role as regulator is to ensure they stay consistent with the rules placed on them.”

URCA took over energy sector regulation in 2016 following passage of the Electricity Act, subsequently issuing BPL with a public electricity supplier licence that makes it an URCA licensee.

Comments

John 1 month, 3 weeks ago

Unfortunately, this may sound good on paper, but this fine will be passed on to the long-suffering consumers, who are now being saddled with BPL's ancient debt, among other things. The Bahamian consumer cannot win for losing. sad, very sad.

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observer2 1 month, 3 weeks ago

Absolutely correct John.

The government is the (1) regulator (2) BEC's largest customer (3) the majority of the account receivable are owed by the government (4) the government is shifting BEC debt onto foreign investors.

When BEC, like Bank of the Bahamas, can't service the debt because the poor ppl stop paying the bills, the government never started to pay it BEC bill, the government will just simply create Resolve II and bail out the bond holders like they bailed out Bank of the Bahamas

By that time the PLP will be back in power and will blame the FNM. As they blame each other Dorian II may strike Nassau....who will bail out Nassau?

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