By NEIL HARTNELL
Tribune Business Editor
The Government was forced to pump "millions" into Bahamas Power & Light (BPL) during COVID-19's peak due to customers' inability to pay, it was revealed yesterday.
Desmond Bannister, minister of works, justifying the state-owned utility's to resume disconnections, said the monopoly power provider "cannot continue to exist" if households and businesses fail to pay their monthly bills.
He told Tribune Business that BPL's "shaky" financial position means it cannot continue the "across the board" COVID-19 bill deferral initiative that was in place for three months during the lockdown, but will instead treat customers on a "case by case basis" and assist where there is "real hardship".
"The Government has come to some agreements with BPL, and I think the first thing to understand is there's a tremendous amount of empathy for people that genuinely cannot pay their bills," Mr Bannister said. "The Government appreciates that.
"There's also the challenge that BPL cannot continue to exist if bills are not paid because the Ministry of Finance had to fill the deficit..... At one stage the Ministry of Finance was putting millions of dollars into BPL because of persons not paying their bills, and that's not fair.
"That was in the months of April and May. That meant you and I [and all taxpayers] are paying bills for some people who are not paying. BPL has to find out who can pay and who cannot, and require people who can legitimately pay to pay. It's a huge obligation that you and I have had to pay, and we cannot continue to do that."
Mr Bannister was unable to recall how much support has been provided by the Government, and referred Tribune Business to Marlon Johnson, the Ministry of Finance's acting financial secretary. He, too, was unable to provide a figure, although he suggested any assistance may have involved the Government paying up what it owed on its light bill as opposed to direct subsidies.
However, Katherine Demeritte, BPL's manager of credit and collections, last week told a local radio show that up to 20 percent of its customer base might fall into the category eligible for disconnection.
Given that it has just over 100,000 customers on New Providence alone, this means that around 20,000 homes and businesses could face having their electricity cut-off unless they pay-off the arrears or work out a payment plan. This figure also dwarfs the 5,000-6,000 that were regularly cut-off during the 2008-2009 financial crisis and subsequent global recession.
BPL last week announced that it is segmenting delinquent customers into three categories. Those who were were more than $500 in arrears for 90 days prior to April 1, and the disconnection suspension, are the lead candidates for immediate disconnection unless they become current or agree a payment plan.
Those who accumulated their 90 days-plus arrears during the COVID-19 lockdown, and customers who were on the bill deferral initiative, now have 21 days to either become current or work out a payment plan - a period that ends on July 28.
Mr Bannister yesterday confirmed that BPL plans to "aggressively pursue" those who were heavily in arrears prior to the COVID-19 lockdown, while those customers in the other two categories are being asked to either clear their debts or work out a payment plan with the utility by July 28.
Ruling out any further 'blanket' bill deferrals, he told Tribune Business: "After that 21-day period, BPL is going to have to look at the circumstances people are in. If someone is 90 days in arrears and having challenges because of COVID-19, it would be best for them to go in and make an agreement.
"Everything has to be on a case-by-case basis in relation to this. It cannot be across the board. The country is opening back up.... BPL's finances have always been shaky, and this has been a very shaky time for them."
Mr Bannister again pledged that BPL's fuel hedging strategy will bring stability and certainty to the fuel charge component of customer bills, and said its implementation - the effects of which should be seen in upcoming bills at 10 cents per kilowatt hour (KWh) - meant it was even more important to collect on accounts receivables.
The minister echoed Dr Donovan Moxey, BPL's chairman, who last week said BPL would only cut customers off as a last resort. He, too, urged both businesses and residential customers in difficulty to contact the utility and work out a payment plan.
“We understand everyone is having a challenging time,” Dr Moxey said. “We need electricity. It’s a necessity, not a luxury, so we want to work with you. Come in and sit down, and let’s determine what’s an appropriate payment plan. We’re very conscious of that. Don’t leave it to chance and hope you don’t get cut off.”
While BPL has unveiled plans to restart disconnecting non-paying customers, Dr Moxey said it was still awaiting a decision from the Government on whether the COVID-19 Relief Programme will continue.
“The Government initially came to us and asked us to put a programme in place for three months,” he added. “We did, and we are certainly more than willing to do what the Government sees as necessary to alleviate the burden on the consumer. We have no problem putting that deferral in place if the Government deems it necessary.”