The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

A senior Bahamas Power & Light (BPL) executive yesterday said the utility had seen "crazy growth" in customer demand over the summer with New Providence's peak load increasing by 8 percent year-over-year.

Ian Pratt, BPL's chief administrative officer, told the Abaco Business Outlook conference that the state-owned utility had seen similar energy demand increases on other islands, including Exuma, as the extra hot summer resulted in households and businesses consuming more air conditioning (AC) to stay cool.

"We've seen it in Abaco, we've seen it everywhere," he said. "In New Providence, our load went up 8 percent this summer compared to last year. We hit 280 Mega Watts (MW) for the summer. Growth in the peak in New Providence was 20 MW. It went from 260 MW to 280 MW. In the space of one year, that's crazy growth. We usually see 1.5 to 2 percent or so growth. Everybody knows the summer was less cool."

As a result, Mr Pratt said BPL needs to expand its generation capacity throughout The Bahamas - both conventional and solar - "to stay ahead" of the demand and "meet our customers' needs". He revealed that the Government had recently issued a request for information seeking feedback from the public and private sector on what forms of renewable energy and other generation sources they wish to see embraced in The Bahamas' energy mix.

This, Mr Pratt added, will be used to inform a forthcoming Request for Proposal (RFP) that will be "rolled out in the coming weeks" as the Government and BPL seek bids on renewable energy, clean fuels (liquefied natural gas) and other forms of generation.

"We're seeking to move towards ultimately about 60 MW of solar in New Providence and, in the Family Islands, about 35 MW of additional solar," he said. "What we are trying to do is march towards the National Energy Policy goal of 30 percent renewable generation by 2030."

Mr Pratt, though, was unable to escape a grilling on BPL's soaring energy bills and why they have gone so high. One student, who did not give their name, said BPL's costs had gone from $100 to $500 this summer. "I just want BPL to quantify and qualify this drastic increase over a short period of time," they said. "For the most part, electricity has been off so frequently. We don't see any give back. BPL needs to tell us how light bills got so high in such a short period of time."

After initially referring to other BPL staff members present, only to be told he "sounds just like a politician", Mr Pratt then referred to the utility's fuel charge "glide path" strategy that is designed to recoup costs that were previously "under-recovered" by not being passed on to consumers. However, he did not explain why the "glide path" became necessary, and then sought to blame the hikes on a combination of increased consumption and higher global oil prices.

"The base rate has not changed since 2010," Mr Pratt said of BPL's tariff structure. "Last year, we released what we call a fuel 'glide path'. It spoke to the fact we had under-recovered a quantity of fuel. The 'glide path' is set to recover that money so we can pay the bills from the fuel supplier and cover ongoing fuel [costs] as we go through."

The BPL executive then sought to shift the conversation to increased consumption by the utility's 113,000-plus customers, acknowledging that his bill - which he said was around $75 in prior years - had gone up because he was using more AC to cope with the extra hot summer.

This, though, did not pacify the student, who said: "I really don't see any justification, truly. I know it can go up slightly, but I really don't see justification for the light bill going up about 100 percent." Asked by Mr Pratt with his electricity usage had increased, the student replied: "It has not gone up at all. If it went up, it's not astronomical enough to make it go up like this at all."

Mr Pratt then switched to the rise in global oil prices, which spiked in 2022 in the aftermath of Russia's Ukraine invasion and the demand surge caused by the world economy's post-global reflating. "If you remember, about two years ago we held the fuel charge at 10.5 cents per kilowatt hour (KWh)," he added. "All the way back a few years ago, fuel went down to $45 per barrel.

"Over the last year, it spiked to $117 a barrel and that's what caused the fuel charge to change. Fuel has gone up significantly." Mr Pratt did not mention that the fuel "glide path" strategy became necessary because the Davis administration decided not to execute the trades that could have secured extra cut-price fuel to support BPL's hedge.

The impact of this was then compounded by the further decision to hold BPL's fuel charge at 10.5 cents per KWh for a further year, even though the utility's fuel costs were soaring much higher because it was having to purchase at 'spot' market prices that were ultimately sent to new heights after the Ukraine invasion.

This is what resulted in the fuel "under recovery" referred to be Mr Pratt, as BPL did not pass the full cost on to its consumers. These sums are now what is being reclaimed by the sky-high fuel charge so that BPL can settle outstanding debts its fuel supplier, Shell, and repay the Government for its previous loan support.

Mr Pratt, meanwhile, disclosed that BPL now has some 113,689 customers spread across all the islands it serves with total power demand standing at 1.7m Mega Watt hours per year. Abaco's customer base is slowly recovering from Hurricane Dorian's ravages, now standing at 7,497 compared to a pre-storm 9,165, resulting in the island reclaiming its status as BPL's second-largest island.

Peak load has recovered from 14 MW in Dorian's aftermath to 21 MW, with the island's all-time high standing at 27 MW. Mr Pratt said BPL has been adding an average 107 customers per month to its Abaco grid over the last six months.