In the next month or two, Bahamas Power and Light (BPL) will release a request for proposals to have an entity begin a tariff study that could lead to an increased base rate for electricity consumption, but the inevitable decrease in electricity costs as the company converts to burning liquefied natural gas and implements more renewable energy production, which could lead to the company paying off its legacy debt, the company's Chief Executive Officer Shevonn Cambridge said yesterday.
Cambridge, who made the remarks during an appearance on Morning Blend on Guardian Radio 96.9 FM, said a comprehensive study could take six months to one year.
He added that the tariff study would lead to a change in BPL's base rate, which he said has not increased since 2010. Cambridge said at the current base rate, BPL does not make enough revenue to cover its expenses.
According to the BPL CEO, the tariff study will explore new revenue collection models that introduce more rate categories than exist currently, and create a more equitable cost distribution for power.
"So part of the tariff study is also to implement some of the revenue collection or building things that are being done in what we call the new utility model," said Cambridge.
"The new utility model has things in it, like EV [electric vehicle] rates, time-of-use rates, they are all the different rate
categories. Right now, we have basically three, we have residential, commercial and industrial.
"But there are places where they have stuff for medical facilities, they have stuff for auditoriums, like I told you they have special rates for EVs, there are vulnerable consumer rates, all of these things.
"So, when you do a comprehensive tariff study, it's all about making your product accessible and affordable to all consumers. Electricity isn't one of those things where it's, you know, for the haves and have-nots. As you said, it's essential. Outside is like 98, 99 degrees. AC is almost now a life-line product, a necessity."
Cambridge said when the study is done, approval to move forward with a comprehensive plan for BPL will have to be given by the shareholders [Bahamian people] and regulators [Utilities Regulation and Competition Authority].
He explained that the tariff study will simply show what BPL's revenue requirements are, and draw a plan to get the utility to that revenue goal.
"Fortunately for BPL, it's a state-owned enterprise, and we're not a profit making entity," he said.
"So, there's really no markup on it [costs], it's more or less what is required to sustain the utility.
"So it's [tariff study] to determine what our revenue requirement is based on our current operational needs and our capital plans going forward. And then to make sure that the tariff is in place to support that, or able to pay that and in that is also servicing the legacy debt."
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