Published On:Friday, April 09, 2010

By NOELLE NICOLLS

Tribune Staff Reporter

nnicolls@tribunemedia.net

DESPITE the proposed electricity rate increase, BEC executives say customers' bills will remain lower than in 1993.

Faced with a crippling financial situation, the state-owned power company is planning to increase its core tariff rate.

Last month, Minister of State for the Environment Phenton Neymour outlined the corporation's financial position, indicating it owed $190 million.

"BEC is losing money left, right and centre and it certainly needs relief. It is the corporation's intention to look to government to see if they would be inclined to adjust the tariff structure so BEC could be restored to some kind of wholesome financial footing," said Michael Moss, BEC chairman.

"What our marching orders are is we need to firstly take our case to the public; let them know what we believe is necessary to put BEC back into a wholesome financial position.

"The information will be independently monitored and presented to government," said Mr Moss.

The government will then make a determination, as there is currently no independent regulatory body for the energy sector.

Mr Moss said the last time there was a tariff increase was 1993. The increase was in line with commitments made by the then FNM government in a loan agreement with the International Development Bank.

Under the subsequent PLP government, there were tariff reductions in 2003, which left the rate below 1993 levels.

The PLP, now the opposition, is blaming the government for the dire financial straights in which BEC finds itself.

Criticising the intention to increase the rates, PLP chairman, Bradley Roberts, called the government "heartless and uncaring".

"The Progressive Liberal Party notes with very deep concern the intention of the FNM government to place additional burden on the backs of the poor and middle class in New Providence and the Family Islands at a time when they are struggling to keep their lights on," said Mr Roberts.

"The consumers of the Bahamas Electricity Corporation have been saddled with heavy surcharges which reflected the movement of the price of oil each step of the way," he said.

The fluctuating fuel surcharge paid by consumers covers the direct cost of fuel, which fluctuates on the open market. Only the core tariff paid by consumers contributes direct revenue to BEC.

"It has been almost three years since junior minister Phenton Neymour and the FNM with much fanfare promised the Bahamian people alternative energy which they claim would bring down the cost of electricity. It has turned out to be another FNM empty promise," said Mr Roberts.

Mr Moss said the rate increases are only one part of the corporations overall strategy.

"Consultants' studies on BEC have said a number of measures are needed for BEC to have a wholesome financial footing. Included in that grouping would be cost containment measures. BEC certainly needs to improve operational inefficiencies, but those in and of themselves will not put BEC in a wholesome financial footing," said Mr Moss.

Asked about whether the public could hold him accountable for the actions initiated under his leadership to restructure the corporation, Mr Moss said, "No question about it."

"There needs to be improved accountability in the entire public sector and BEC is no exception. The thing here is BEC needs to make its operation a bit more transparent going forward," he added.