In light of the vexatious rolling blackouts caused by generation difficulties, the special provisions for generation contained in the public electricity supplier license issued by the Utilities Regulation and Competition Authority (URCA) to Bahamas Power and Light Company (BPL) have assumed particular significance.
URCA is the regulator for the electricity sector, and announced days ago that it had issued its first public electricity supplier license. That license was issued to BPL and authorized the company to engage in the generation, transmission, distribution and supply (GTDS) of electricity in The Bahamas. The license is valid for a period of one year from the commencement date.

Generation
Part F of the license deals with special provisions for generation, and section 34 specifically addresses BPL's duties as electricity supply system operator. Under that section, BPL is required to dispatch "sufficient generating capacity" to meet electricity supply system requirements in a prudent manner, taking into
eration various operating considerations. Those considerations include, but are not limited to, least-cost, planned and forced generator maintenance schedules and operating reserves (both on-peak and off-peak) and are subject to the terms and conditions of any PPAs (power purchase agreements).
This section of the license also deals with IPPs (independent power producers) -- such as Providence Energy Partners Holdings proposes to be and possible others -- and says (section 34.3) that BPL "may purchase some or all of its energy and/or capacity requirements" from IPPs pursuant to relevant PPAs, and that BPL (section 34.4) may "purchase the electricity output from renewable or alternate energy sources on an energy only or capacity and energy basis as appropriate in accordance with the procedures agreed with or established by URCA and subject to relevant PPAs".
The license also asserts that -- except as authorized by URCA in connection with purchases of renewable energy from customer-owned generation for self-supply -- "BPL shall not purchase electricity from any person other than an IPP and may not purchase electricity from an IPP except in accordance with the relevant PPA."

Customer generation
The license also provides (section 34.9) that, subject to satisfactory inspection of the interconnection by the inspector and by BPL, consumers who generate renewable energy for self-supply may sell energy to BPL, and the utility may purchase such renewable energy at rates to be proposed by BPL and approved by URCA.
According to section 34.10, BPL shall file with URCA, from time to time, its proposals that describe the basis on which, and the rates at which such consumers may sell energy to and purchase energy from BPL; these proposals will be subject to URCA's review and approval.
BPL is required to establish and maintain a register of these consumers, which shall be filed with URCA and which must be updated as URCA may direct from time to time.

Renewable generation
URCA also licensed BPL (section 38.1) to develop renewable and alternative energy resources for electric power generation in accordance with the license, the Electricity Act and other government energy and electricity policies.
According to section 38.2, BPL "shall develop and implement a standard offer contract (SOC), which shall be subject to approval by URCA and which shall reflect the objectives of government policy, to facilitate and encourage the development of renewable energy supply at the customer level".

Performance standards
The license also requires BPL (21.1) to make its best endeavors to comply with or exceed performance standards that have been agreed with URCA. Performance standards may be designed such that there is a balanced framework for penalties or rewards compared to historical or benchmarked performance, and in these circumstances shall include "zones of acceptability" where no penalties or rewards would apply, according to the license.
Section 21.2 states, "Where performance falls below agreed levels, the first step shall be discussion with URCA to assess the reasons, make and agree on corrections for poor performance as appropriate within such time as may be agreed between the licensee and URCA, and failing such agreement within such time as shall be directed by URCA."
BPL will be given reasonable time to rectify poor performance levels, and where performance continues to fall below the standard after those agreements, "URCA may impose penalties for poor performance where the licensee has not implemented the agreed on action plan," according to section 21.3.

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