The cost of electricity should abate by November, if the future outlook for fuel prices remains on a downward trend, and there are no other major shocks that drive costs up, Bahamas Power and Light Chief Executive Officer Shevonn Cambridge said yesterday.

Cambridge explained during an interview with radio host Dwight Strachan on Morning Blend on Guardian Radio 96.9 FM, that the glide path to recover money lost while BPL kept fuel charges to consumers artificially low will normalize by November, as the cost of fuel decreases. He told Strachan though that there are no guarantees when it comes to fuel markets.

"I guess it all depends on the market and the cost of fuel. Come November, we're gonna go back to the real time market pricing, along with what is being supplemented by the hedge that remains," said Cambridge.

"So, it's just a real time pass-through of the fuel costs. But all of the market forecasts are that the fuel is going to trend down barring anything on the worldwide market."

Cambridge said fuel hedging is still occurring at BPL, though not at the same level as in 2020, when the country enjoyed the lowest fuel charge on power bills in decades.

He explained that while the hedging strategy worked while the cost of fuel was low, things have changed in the market.

"Back in 2020, when the hedging strategy was put in place, fuel was at an all-time low," Cambridge said.

"At that point, all utilities throughout the industry were hedging, because there was nowhere else for the price to go but back up.

"BPL had a hedge strategy that it developed, which was based on a declining volume. And so the first year was 80 percent. The second year, the volumes dropped to 60 percent. And I think where we're at now is we're at just above 50 percent.

"But the strategy is that whenever the market price reached a certain point - which would be below our strike price, so to speak - to increase the volumes.

"The market has not reached that point, since back then. But there's other things you can do, you can change your strike price. And that's a getting into the mechanics of it. But the bottom line is you hedge when fuel prices are low.

"When fuel prices are high, it doesn't make good sense to hedge. But also when fuel prices are high, if they're starting to trend down, you may wish to hold off on increasing your volumes. It's speculative. It's based on some complex analysis. But we are still hedged about 50 percent. And the prices right now are trending down."

Minister of Works and Utilities Alfred Sears said recently that Bahamians might not begin to see a reduction in their electricity costs until next year, as fuel prices continue to decline.

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