Although Grand Bahama Power Company (GBPC) has explained that its fuel hedging strategy has resulted in its fuel cost increasing at a much lower rate than customers would have faced in the absence of hedging, some Grand Bahamians have expressed dismay and disappointment at GBPC's recent announcement that there will be an increase from 10 cents to 11.5 cents per kilowatt hour (kWh), beginning November 1.

Union activist Lionel Morley said it is a sad day on Grand Bahama when the island’s lone electricity provider appears insensitive to the vulnerabilities of the residents.

“Just recently, they got an increase (in the base rate) … while we understand that inflation has risen, it seems that the power company will find a way to [inflict] 

whatever damage to the already hurting customers in Grand Bahama,” Morley said.

“We don’t mind partnering with you (GBPC), we don’t mind paying our fair share of our bill, but what role do you play other than being a shareholder, collecting an enormous amount of profit and passing on anything to its consumers?”

Coalition of Concerned Citizens (CCC) President Eddie Victor, who has been agitating for lower electricity rates for more than a decade, agrees that this is the wrong time for an increase of any sort.

“Grand Bahama is still recovering from Hurricane Dorian and the pandemic that is creating an economic fallout as well,” Victor said.

“There seems to be a disconnect between the power company and the GBPA (Grand Bahama Port Authority) with the economic condition of the island. One would think they would have done an economic impact assessment in making this decision.”

However, GBPC’s Chief Operating Officer Nikita Mullings pointed out in an interview with Grand Bahama News that the fuel charge increase is a direct result of global fuel cost increases.

Mullings added that the company delayed the price adjustment decision during the summer months, as it was cognizant that customers used more electricity at that time.

“So, we went with the November 1 implementation because it would be cooler, and consumers will use less electricity,” she said.

Mullings added that GBPC customers are still benefiting because of the company’s hedging program.

“If customers can recall, before 2015, fuel charge was about 20 cents or more per kWh. So, what the hedging program does is allow us to protect our customers from the volatility of the market,” she said.

Mullings explained that in being proactive for 2023, GBPC was able to hedge 80 percent of its fuel at $51 or less per barrel.

“What it means is that the fluctuation that the customers will see or [are] seeing [with fuel per barrel], 20 percent of that we aren’t allowed to hedge because we are only allowed by our regulatory framework to hedge 80 percent of the fuel, and not allow our customers to absorb all of the risk if fuel goes up or down.

“For example, when fuel increases to say $90 or $120, which we have seen. Because we would have locked in 80 percent at the $51 or less, our customers are safe. The fuel cost is not increased as much because they would have been protected from the amount; we have been able to hedge.

“The advantage is that customers are able to pay less for fuel, even when we see fuel prices begin to skyrocket worldwide.”

In a company statement released just over a week ago, Mullings said, “We know there is never a good time for a rise in costs, and these are particularly difficult times for many Grand Bahamians. Without hedging, fuel costs would be at about 18 cents per kWh.”

She encouraged customers to be mindful of energy use and to consider adopting daily habits that will assist with managing electricity cost.

Further, Mullings urged residents to visit the company’s Smart Home in the Regent Center.

She told Grand Bahama News, “It is a live demonstration of the use of appliances that we use in our home on a day-to-day basis, so customers are able to see in real time when they turn on each appliance how that correlates to the dollar, which they see reflected on their bill.

“And so, we also share energy saving tips like putting water heaters on a timer. A lot of times, we leave our heaters running and there is hot water that we are not using. But if it is on a timer, that is a way to conserve energy,” she explained.”

The passing on of the fuel costs to consumers is separate from a rate increase GBPC was granted early this year.

In January, GBPA announced that after months of review, it approved GBPC’s application for a rate increase, albeit at a much lower 3.3 percent – down from the 6.3 percent requested in the initial filing.

Last week, Tribune Business reported that Grand Bahama’s electricity costs will be 40 percent lower than Nassau’s and the rest of The Bahamas during the 2023 summer peak after the island’s utility locked in fuel costs at 12-14 cents per kilowatt hour (kWh).

The Tribune quoted Dave McGregor, Caribbean chief operating officer for Emera, GBPC’s 100 percent owner.

“If I were to believe the numbers we’re seeing out of BPL next summer, all things being equal, we’ll be 40 percent less cost than the rest of The Bahamas,” McGregor said.

“I’ve seen the numbers that BPL has pushed out for next June. If they are at 27 cents per kWh, and we’re at 12-13 kWh, that’s a huge difference, and I hope that helps investors decide where to invest because Grand Bahama needs it.”

On New Providence and elsewhere, businesses and many other customers are bracing for bills that are expected to double or nearly double by next summer.

The prime minister announced that effective October 1, the 10.5 cents per kWh fuel charge for Bahamas Power and Light (BPL) – a public-owned entity, which is a subsidiary of the Bahamas Electricity Corporation – increased to 12.5 cents for consumers who use less than 800 kWh.

It will climb as high as 18.5 cents next June for that category of consumers (the smallest category of consumers, according to the BPL CEO).

For a majority of consumers, who consume more than 800 kWh, it has increased this month to 14.8 cents and will rise to 27.6 cents next June.

While some observers have questioned how GBPC was able to achieve the lower fuel charge increase when compared to the increases announced by the prime minister, for BPL, Minister for Grand Bahama Ginger Moxey last week expressed concern over GBPC’s announcement and what it will mean for Grand Bahamians, many of whom are already struggling to make ends meet.

The minister stressed that she was disappointed by the power company’s decision.

“As minister, I am with the people of Grand Bahama. It is never a good time for any kind of increase but especially now when we are trying to recover,” she said.

Mullings noted that GBPC is invested in its customers having manageable power bills.

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