While the Grand Bahama Port Authority (GBPA) had no intention of increasing Grand Bahama Power Company's (GBPC) rates to customers following the passage of Hurricane Matthew, it did approve the "recovery of a $20,600 regulatory asset through a fuel/other charge of 10 cents per kWh" over five years.
ICD Utilities Limited's (ICDU) annual report revealed that the company, "on a monthly basis", plans to calculate the difference between the fuel charge and the 10 cents per kWh, and funnel that into a fund to recover the "regulatory asset" from 2017 to 2021.
"This will continue over a five year period," the annual report states.
"If there is an over recovery within the five-year period, additional funds that were collected from customers over the period will be placed into the hurricane cost rate stabilization account. If there is an under recovery within the five year period, in year six (2022) an agreement will be reached with the GBPA to collect the balance through rates."
ICDU is a 50 percent shareholder of the GBPC.
In December the GBPC said it would absorb $27.5 million in hurricane damage costs and refrain from increasing customers' bills for at least five years, as the company entered cost management mode following Hurricane Matthew.
GBPC's hurricane damage assessment summary included 1,362 damaged transformers; 2,025 damaged poles; 1,150 damaged brackets; 6,000 damaged insulators; 3,090,000 feet of downed conductor wire; and 1,000 damaged arrestors. The Category 4 Hurricane Matthew struck Grand Bahama with full force on October 6, destroying virtually the entire island's electrical transmission and distribution system, GBPC notes.
However, after consultants reviewed the damage and reported back to the executives of the GBPC, it was decided that the uninsurable costs of the damage would not be passed on to the power company's customers. Instead, GBPC will enact a five-year cost savings plan that will include "prudent cost management and fuel purchasing".
"In the course of our meetings with GBPC executives Sarah MacDonald, director; Archie Collins, president and CEO; and Tony Lopez, CFO, the GBPA expressed a strong desire that such costs should not result in an increase in energy billing to customers," said the GBPC release.
Despite the 10 cents per kWh addition, ICDU, in its report, maintained that GBPC's "all-in rate for electricity (fuel and base rates)" will remain at 2016 levels.
Click here to read more at The Nassau Guardian
