GB Power in 25-year east, west extension


Grand Bahama Power Company headquarters.


Tribune Business Editor


Grand Bahama Power Company yesterday confirmed its East and West End electricity supply agreements have been extended for a further 25 years - a revelation not met with universal acclaim.

A spokesperson for the energy utility, responding to Tribune Business inquiries, said it had simply exercised the renewal option within the timelines stipulated in the original agreements that expired in 2018.

“The Grand Bahama Power Company would have exercised its option for both the East and West End agreement,” they told this newspaper. “We would have filed that with the previous [Minnis] administration through our legal counsel in sufficient time, so those agreements have been extended.

“It was extended for an additional 25 years, both for West and East Grand Bahama. It is confirmed that we would have extended our option, and that it was sent over to the previous administration in time.” The spokesperson’s comments are the first official confirmation that the East and West End energy supply agreements were renewed, coming three years after the original ones expired.

Pastor Eddie Victor, president of the Coalition of Concerned Citizens (CCC), and a long-time GB Power critic, described the two 25-year extensions as “sad” and pledged to address the matter with the newly-elected Davis administration.

However, as previously reported by Tribune Business, the first East and West End supply agreements contained a potential obstacle for rival electricity suppliers seeking to break-up GB Power’s monopoly. For they contained language that seemingly gave the utility a “right of first refusal” on any renewal to the exclusion, or lock-out, of all competitors.

For both agreements give GB Power an option to renew for a further 25 years, “upon the same terms and conditions”, provided it gave notice of its intention to do so to the Government some 60 days before the existing deals expire. This seemingly put the decision on whether there would be an extension in GB Power’s hands, not the Government’s.

Kwasi Thompson, ex-minister of state for Grand Bahama, yesterday said he was unable to recall what happened with the East and West End electricity supply agreements during the Minnis administration’s term in office.

He added that the Attorney General’s Office had been asked to review the matter and give a legal opinion, although the precise issues being assessed were not disclosed. Carl Bethel QC, the former attorney general, could not be reached for comment.

“I do not recall what happened,” Mr Thompson said. “The Attorney General at the time had reviewed the matter and gave a legal opinion on it. Whatever that legal opinion was, I don’t remember. If I’m not mistaken the Attorney General’s Office communicated directly with the Power Company on it.”

GB Power, then Freeport Power, agreed to expand beyond the Port area in 1993 to meet the then-Ingraham administration’s desire for the electrification of East and West End. Tribune Business later obtained copies of the two 25-year agreements, one dated June 23, 1993, and the other August 31, 1993, that effectively gave it a 25-year monopoly on Grand Bahama’s energy market.

Using virtually identical terms, the agreements gave GB Power “the sole right” to supply electricity outside the Port area. And it was granted similar tax breaks as those enjoyed within Freeport, including exemptions from Customs duty, Stamp Duty and Business Licence fees, along with the use of so-called ‘bonded’ goods without penalty.

Pastor Victor, who has been extremely vocal in his support for a $30m proposal by Northern Bahamas Utilities (NBU), a wholly Bahamian-owned group, to take over power supply in both East and West End through the operation of two utility-scale solar plants billed as able to reduce electricity costs by up to 40 percent, yesterday argued that his options are not exhausted.

“It is sad to see that the Government went ahead and executed that agreement knowing there was a Bahamian company that could provide power to those government-controlled areas,” he told Tribune Business. “As a Coalition, we will oppose it publicly.

“We could look at it legally. The question that would arise is can the Government extend the agreement with the laws that were passed in the Electricity Act, which might prevent it from happening. According to the law, they must be regulated by URCA outside Freeport. If there is no URCA regulation, it violates the law.”

GB Power is currently locked in a Supreme Court battle with the Utilities Regulation and Competition Authority (URCA) over whether the latter has the authority to regulate it within the Hawksbill Creek Agreement (HCA) area, and Pastor Victor added: “One of the things we have to look at by law is whether it is legal for them to provide power without URCA regulation.

“That’s one aspect we could look at. The announcement [of the extension] was not made publicly. There was no public announcement that the agreement was renewed. There was no mention in Parliament that the agreement was renewed. Parliament should have been made aware that the agreement was renewed, especially something that was extended for 25 years.

“As far as I’m concerned it’s a blow against Bahamians. The Government of The Bahamas has renewed a 25-year agreement with a foreign company over Bahamians, and that speaks volumes right there. It speaks volumes right there,” he continued.

“It goes against Bahamianisation, it goes against efforts to bring down the electricity rates across The Bahamas, and speaks to the fact why the Government did not give us [Northern Bahamas Utilities] an opportunity for a full presentation.

“They said they would give us an opportunity to present to Cabinet, and it never happened. Somebody has to stand up and deal with that. We’ll have to let our voices be heard.”

GB Power is 100 percent owned by Canadian utility giant, Emera.


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