The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

GRAND Bahama Power Company is “about to head down the same road as Bahamas Power & Light”, its management union president warned yesterday, as he revealed the utility has yet to receive the $80m in capital works funding approved by Parliament pre-election.

Kendal Culmer, head of the Bahamas Industrial Engineers, Managers and Supervisory Union, confirmed to Tribune Business that he and others were informed in a recent meeting by GB Power executives that the $80m financing - repayment of which is guaranteed by Bahamian taxpayers - remains outstanding and the utility could “be in financial trouble come January” if it does not materialise by then.

Critical network repairs and upgrades have been put “on pause” in its absence, he added, while also disclosing that the three utility-scale solar farms installed on Grand Bahama under previous owners, Emera, are “only good in the day” because plans to add battery energy storage systems (BESS) are also on hold until funding is received.

And Mr Culmer voiced fears, harboured by many in Grand Bahama’s private sector, that a taxpayer subsidy for GB Power could be included in the Government’s Budget for the next 2027-2028 fiscal year because it has “blown away” all its profitability through the Davis administration converting it to the same Equity Rate Adjustment (ERA) tariff structure employed by BPL for the rest of The Bahamas.

The union president said making the first 200 kilowatt hours (KWh) free for consumers has had an immediate impact on GB Power’s income, reducing its revenue collections even as costs remain unchanged, which applies pressure to its financial sustainability. Mr Culmer warned that, should the utility be plunged into consistent annual losses, these will ultimately have to be covered and plugged by the Bahamian people through the taxes they pay.

As a result, he warned that GB Power will “soon be heading down the BPL path” of multi-million dollar annual losses, government/taxpayer loans and subsidies to keep it afloat and operational, and growing power outages and unreliable energy supply, notwithstanding the lower electricity bills enjoyed by Grand Bahama businesses and residents that the Government has justified the acquisition on.

“That is correct,” Mr Culmer replied, when asked by Tribune Business if it was accurate that GB Power has yet to receive the $80m in borrowed “working capital” authorised by Parliament before the May 12 general election. “We had a meeting a few weeks ago, and I asked the question of how the revenue was being collected now seeing that the first 200 KWh are free.

“That has slowed down, and we’re not collecting as much money as previously. But, before I could ask about that $80m, the finance person said if we don’t get that $80m soon we could be in trouble come January. They [senior management] have been going to Nassau every two weeks to meet with the Ministry of Finance to ask when we will be able to access those funds, and they’ve just been getting the run around.

“They keep getting turned around in access to the funds. We don’t know where it is. It’s as if it has vanished… We are in a terrible state right now. Revenue collection has dropped tremendously because of the first 200 KWh being free. We are almost at the point where we can almost see, in the next Budget, we are going to have a line item to subsidise GB Power,” Mr Culmer asserted.

“We are going to need some subsidy somewhere down the road. What they did basically was they blew away all the profitability from May to now.” GB Power, based on Mr Culmer’s confirmation, has now been waiting five to six months for funding that is critical to maintenance and improvements to the network infrastructure that serves the whole of Grand Bahama.

Neither Nikita Mullkings, GB Power’s chief executive, nor Senator Latrae Rahming, the Prime Minister’s communications director, responded to Tribune Business text messages sent to their cell phones seeking comment before press time last night. The $80m was to be borrowed by Grand Bahama Energy Company, the special purpose vehicle (SPV) wholly-owned by the Government, which acquired GB Power from Emera, the Canadian energy giant.

However, Royal Bank of Canada (RBC), the lender, imposed a pre-condition that the $80m borrowing must be guaranteed by the Government, meaning the Bahamian taxpayer, before it would advance the funds. This underwriting was duly approved by Parliament prior to the general election, so it is unclear why the funding has yet to be released to GB Power.

In the meantime, Mr Culmer confirmed that key upgrades, which had been planned by Emera, have effectively been left in limbo. “They gave us January as the benchmark,” he told Tribune Business. “If we don’t get anything before then, it is possible we will see some deterioration. There were some plans with Emera to do some things in the summer, around $50m.

“Emera had a plan for five years, and that was where we figured they’d got the $80m from; put something on top of that, but they [the Government] didn’t put in the money.” As a result, Mr Culmer said plans to equip Grand Bahama’s utility-scale solar farms with battery energy storage, which would allow excess power generated during the day’s son to be stored and supplied to the grid at night, have been delayed.

“Those solar farms in Grand Bahama are only good in the day,” the management union head told this newspaper. “There were plans to implement battery storage for the solar farm, and do some network upgrades, but that’s gone on pause because we are just barely paying the bills right now.

“We’re about to head down the road of BPL. We are about to head that way if we don’t do something soon. Your source was correct when they told you we haven’t received those funds yet. If we don’t get anything soon we will be heading down BPL’s path.”

That is precisely the fear voiced by Dillon Knowles, the former Grand Bahama Chamber of Commerce president, and others in the private sector. While agreeing that Grand Bahama electricity costs needed to be lower, they warned that - in the absence of a coherent strategy by the Government - simply lowering GB Power’s costs by adopting BPL’s rates and prices, in the absence of cost reductions, would plunge the utility into unsustainable losses.

These losses would then have to be covered by the Bahamian people through the taxes they pay, rather than Grand Bahama business and resident light bills, in the absence of any wider strategic reform plan for GB Power. Meanwhile, Michael Pintard, the Opposition’s leader and Marco City MP, yesterday also disclosed that constituents who worked at GB Power had also informed him that the $80m funding had yet to be released.

“Earlier in the week, I had raised the concerns being expressed by persons at GB Power that there was an outstanding $80m, which I understand did not necessarily come,” Mr Pintard told Tribune Business. “I was hearing from employees of GB Power who live in my constituency that they have not been able to proceed with repairs and upgrades in the absence of the funding actually coming.

“There was concern as to whether they had completed the financing.” Mr Pintard said his and the Opposition’s inquiries had sparked no response from the Government, as he argued it was impossible to expect it to any better with GB Power given that it had “presided over failure” at BPL.

The Government has yet to disclose its “game plan”, and the commercial and economic rationale, for acquiring GB Power and adding more than a quarter-of-a-billion dollars to The Bahamas’ $12bn-plus national debt other than implying that Grand Bahama businesses and households will see a reduction in energy bills and costs following the acquisition.

Emera’s financials for the 12 months to year-end 2025 show that GB Power generated a $10m Canadian dollar contribution to the utility giant’s “consolidated adjusted net income” for the period - a figure that was slightly down on the prior year’s $11m. Using the current exchange rate, that $10m Canadian dollars translates into about US $7.3m.

Those profits were generated from $162m Canadian dollars worth of revenue, which represented a 16.5 percent year-over-year increase compared to 2024’s $139m Canadian dollar top-line. The increase is likely due to increased economic activity among GB Power’s 20,000-strong customer base, with Carnival’s $600m Celebration Key destination having opened last July. The exchange rate conversion means GB Power generated $118.26m worth of revenues in US dollars last year.

The value of the Grand Bahama-based electricity provider’s physical assets, namely property, plant and equipment, narrowed slightly last year from $371m Canadian dollars at year-end 2024 to $361m Canadian dollars some 12 months later.

To give an idea of what the Government has acquired, Emera said: “With $378m US dollars of assets, and approximately 20,000 customers, GB Power owns 98 mega watts (MW) of oil-fired generation, approximately 100 kilometres of transmission facilities and 1,000 kilometres of distribution facilities. GB Power’s approved regulatory return on rate base is 8.52 per cent.”