FOR a number of hours over the weekend, residents in the Winton area experienced a power outage. It wasn’t load shedding this time, rather that the substation there had tripped offline – but for residents sitting with no lights and no air conditioning, there was little difference.
It is also not the only outage that residents have experienced recently – and will likely continue to experience. Power generation has not been Bahamas Power & Light’s only issue – with its distribution network creaking at the seams with age and the need for investment.
BPL’s chairman, Dr Donovan Moxey, has conceded as much – telling Tribune Business last week that “there are certain parts of the network not working optimally”. They are trying to fix the network “given the limits in funding”.
Now, more than ever, the question is – where will that investment come from?
The finances at BPL were looking perilous even before COVID-19 hit the economy. Now BPL has taken a look at the plummeting amounts of revenue, and announced that it is going to resume disconnections. Already voices have urged for disconnections to be the last resort – Chamber of Commerce director Debbie Deal among them last week, warning of the difficulties for business to get restarted if they are cut off, and for the large numbers of unemployed to be able to pay at all as they wait for the economy to restart and money to be put back in their pockets.
The effects of COVID-19, however, are not the root of the problem – the problem goes back further than that.
BPL had a plan to refinance – but it was a plan that didn’t win the backing of investors. A significant part of that was that the loan wasn’t going to be backed by the government. If you’re a lender and you see a utility looking for money backed by the government, that adds confidence that come what may, your loan will get paid back. If you see a utility – particularly one that has had a rollercoaster history such as the power provider for The Bahamas – without that backing… well, it’s perhaps no surprise there were few takers for the deal.
Add a shortage of people paying their bills because of COVID-19 on top of that financial situation, and it’s bad news piled on top of bad news.
Where does this leave BPL? It’s obviously unsustainable commercially to continually have not enough money coming in to cover the costs of supply. Hopefully, as the economy starts to move back up the gears, that situation will become easier. That won’t fix the underlying problem though – of finding the finance it needs to restructure and pay for the upgrades to the distribution network.
For that problem, the government may need to be the one to step in – either to give its backing, essentially using its support to underwrite the loan, or to be the lender themselves. That would have a cost to the public, of course, but part of the original plan would have seen a bond added to the BPL bill each month in order to repay the costs.
If that plan was deemed to be good enough to offer to investors, is it not good enough for the government to be the investor?
More to the point, as we report today, the government has already been pumping “millions” into BPL during COVID-19’s peak to make up for the shortfalls in payments from customers – so we’re already paying out money to keep the utility going.
There are two problems here – the short-term one of providing power to people who presently cannot pay for it, and the long-term one of an electric grid that doesn’t meet the needs of the nation. Both problems need money to solve them. One has already seen government intervention, so perhaps it’s time for the second to see the same.
One thing is for certain – the time to solve both problems is now, not kicking the can down the road again. That’s how we got here in the first place.
Comments
concerned799 3 years, 9 months ago
If sole government owning of BEC was the solution it would have been solved long ago.
The government has no money and enough fiscal acts to juggle it does not need any more.
BEC must be privatized so it can go on providing service. All other options have been tried and failed.
The_Oracle 3 years, 9 months ago
Allow unfettered private sector investment in Alt energy. Solar for self consumption. Installed to Code. Period. Canadian Electrical Code. No need for the convoluted and ever changing political considerations espoused in the Name of self preservation for BEC/BPL by URCA and BPL/BEC themselves. Reduce the demand on BEC by those who will invest in Energy for themselves, Reduce the burden on the Government. I'd rather subsidize one full school buss than 200 empty ones. A reduced stress/load on Transmission/Distribution will result. Reduced dependence on foreign currency funded foreign oil. Government needs to stop their obvious obscuring and convoluting of what should be a very simple situation.
professionalbahamian 3 years, 9 months ago
Oracle,
You are absolutely correct.
Will "they" listen. No "F" in "WAY" lol. Maybe once the crooked powers that be are inline to benefit the most from allowing solutions.
JackArawak 3 years, 9 months ago
The government has kick this can down the road so many times that it has passed the point of no return. It will take a bona fide miracle to fix BPL. Pretty much every single thing the government does is a sweet deal for one of they boys. That, plus the cash they steal themselves, large travel budgets for they sweetheart, corruption at it's finest. Don't cause me get wex this morning
concerned799 3 years, 9 months ago
Granted past chances to fix this have all been squandered. The question remains tho, as the sun will rise tomorrow, what should be done?
Proguing 3 years, 9 months ago
Want to make money? Go in the generator business.
birdiestrachan 3 years, 9 months ago
The masterful liar Banister allowed three years to pass. Now he blames COVID 19.he was busy all about Ms: Osborn's make up charge.
Just play the blame game as time passes by. Blame the PLP for three years and for the next two blame. hurricane Dorian. COVID 19 and the PLP.
concerned799 3 years, 9 months ago
What should he do then? As in, what is your solution?
JokeyJack 3 years, 9 months ago
Finances are always an issue for everything. Government debt building up for years. Honest and thoughtful Bahamians who try to live wise financially and practice family planning, give their kids a good education, etc. and by that make the country a better place - have their sacrifices and efforts foiled by a government that allows an overflow of immigrants to come in and tear down wages. The excuse is always "we need investment to make employment." What good does it do to have employment if we are not the ones being employed?
We would have been much better off with a current population of 150,000 Bahamians living the good life in 2020, than what we now have 350,000 people of who knows what living in a veritable garbage dump.
Of course, we don't have Swiss bank accounts like some of these foreigners - so our view is surely different.
At this point, the battle is already lost. A new government coming in that actually wanted to solve the problem could not do so - because foreign powers holding our debt would simply threaten them to raise the interest on that debt to 20% (or more) unless they do whatever they say.
The farm is already sold. When the cows die, there will be no more milk for us.
tribanon 3 years, 9 months ago
Very much on point. It's too late now. We can only only lower our heads to the setting sun over Bahamaland.
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