The Government of The Bahamas is moving to close the gap in the cost of energy. This is a critical step in the development of the country’s future said, Prime Minister, the Rt. Hon. Perry G. Christie, who delivered the keynote address at the 24th Annual Bahamas Business Outlook seminar. The event was held on January 29 at Melia Resort, under the theme ‘Securing Our Bahamas through Planning Partnership Products.’

“My government recognizes that energy costs in The Bahamas are among the highest in the region at US$0.40 kWh for residential customers and US$0.44 for nonresidential customers,” said Mr. Christie. “In addition, our energy infrastructure is outdated. We also recognize that reducing the cost of energy is paramount to reducing the cost of living and doing business for both domestic and business consumers. It would spur sustained economic development by both domestic and foreign investors.”

He said that as a result of this objective, the government introduced a National Energy Policy in 2014. In addition, goals were established to meet 30% of baseline generation through renewable technologies by 2030. He said that the Electricity (Amendment) Bill 2014, and Electricity (Renewable Energy) Regulations 2014, which just recently passed in Parliament, speak to the requirements for installation and operation of generating stations and grid interconnections by renewable energy producers in areas of low population density. Such measures, Mr. Christie believes, would positively impact the development of the Family Islands in the future.

“The restructuring of the country’s electricity corporation is a major initiative effort by my government, one that is designed to reduce energy costs through privatization of management while at the same time maintaining equity ownership of an important national asset and essential service, using for this purpose a model similar to the Nassau Airport Development Company (NAD) management contract with Vantage, formerly Vancouver Airport Services. We should complete a critical part of the BEC re-structuring exercise shortly with the selection of the successful bidder,” he said.

He pointed out that with the price of oil significantly falling since the beginning of the year (the cost of a barrel of diesel dropped from $117 in October to $77 in January, and a barrel of heavy fuel oil from $99 to $50), consumers would soon begin to see a reduction reflecting the change on their upcoming electricity bills.

“Crude oil is purchased at a fixed-price over contractual periods and so there is expected to be a lag in rate reductions,” he said. “BEC has instituted billing reductions in the range of 11% to 12% for residential consumers for the specified period October 2014 to January 2015, based upon the customer type, basic rate, units consumed and fuel charge. Fuel surcharge has dropped by about 5 cents, which is a reduction of 17%. Commercial consumers will be getting reductions on their bills and further interventions will occur in the coming months.”

Mr. Christie also spoke of his recent meeting in Washington, D.C. with U.S. Vice President Joe Biden and colleague Heads of Government from the region. As the recently-appointed Chair of CARICOM, Mr. Christie said that he participated in discussions on energy security matters and the potential transformative impact on the Caribbean sub-region with the United States. Some of the topics that were discussed included: the promotion of opportunities in investment in energy, forestry, mining, infrastructure development, tourism, airline services, financial services, agriculture and fisheries.

In addition, Mr. Christie said that he engaged in discussions on eliminating the current practice of using a country’s Gross Domestic Product (GDP) per capita as the determinant criterion for denying or allowing access to concessional financing. He said that ‘GDP per capita does not adequately reflect developmental differences within societies.’

“Happily, the United States and Japan are showing greater flexibility on the issue of GDP per capita as a determinant for concessional financing for development,” said the Prime Minister.

“The United States announced on 26th January that they will no longer block concessional financing to middle income countries in the International Financial Institutions as it relates to energy and climate change financing, based on GDP per capita. It also announced that the Overseas Private Investment Corporation would be able now to finance projects related to renewables and climate change mitigation in The Bahamas. I welcome this positive development and urge Bahamian and American business people to look at projects which can qualify for this financing.”