NASSAU, BAHAMAS — Bahamas Power and Light (BPL) constructed Station A at a 35 percent reduced cost over similar-sized power plants, according to Opposition leader Michael Pintard, who defended the company's purchase of seven engines from Wärtsilä in 2019.
A Bahamas Power and Light (BPL) report providing a review of Station A, which housed the Wärtsilä engines, noted that the plant has to-date cost an additional $21 million.
The report dated July 30, 2023, was prepared by BPL's CEO Shevonn Cambridge for Prime Minister Philip Davis and former Works and Utilities Minister Alfred Sears and was tabled in Parliament by Energy and Transport Minister JoBeth Coleby-Davis. That report highlighted numerous decisions and operational efficiencies which resulted in additional costs for the utility and ultimately consumers.
Pintard sought to defend the actions taken by BPL and the Minnis administration regarding the Wärtsilä deal.
Station A was reportedly constructed at a cost of about $98 million, and has a capacity of 132MW, giving an average cost per megawatt of $742,000.
"After completion, a cost comparison was performed for Station A as compared to other Caribbean Island power plants, and it was determined that, on average other Caribbean plants were constructed for $1.1 million per megawatt. This gave Station A a valuation of about $145M, with additional equity realized by BPL on its balance sheet of about $50M. BPL built Station A at a 35 percent reduced cost over similar-sized power plants," Pintard noted.
While the report by Cambridge noted that plant has to date cost an additional $21 million, Pintard called on Energy Minister JoBeth Coleby-Davis to provide specific details, including specific expenses and date of expenditures.
According to Pintard, the Wärtsilä engines are tri-fuel engines that can operate on LNG, Heavy Fuel Oil (HFO) and ADO. He further stated BPL made the decision to add three additional engines for a total of seven because it was determined that the seven engines could fit into Station A, and the cost for the engines was negotiated at a significantly discounted price. Additionally, Shell NA had agreed in principle to purchase all seven engines as part of the PowerCo entity that was to be formed.
"The engines that were installed are gas-capable, and the gas nozzles were not installed to make the engines gas-ready because LNG was not planned or anticipated as a fuel source for at least three years. If the engines were made gas-ready from day one, then that investment would have been wasted because after three years without LNG as a fuel source, the nozzles would have been contaminated by the liquid fuels (HFO and Automotive Diesel Oil (ADO), and would have had to be replaced at an additional cost. The engines would be made gas-ready only when the LNG fuel source is available, and this would require only a few weeks to accomplish," Pintard noted.
Pintard also said that with respect to the Wärtsilä contract, the cost of $6.9 million per year was based on a five-year pricing schedule for operations and maintenance services because there were discussions with Shell NA to have Wärtsilä continue as the O&M provider for the power plant once PowerCo became commercially operational.
When BPL's new Board decided at year-end 2022 to end the Wärtsilä O&M contract after three years, the cost was adjusted from upfront cost recovery over five years to upfront cost recovery over three years, and thus the average annual cost was increased from $6.9M to $8.2M to recover upfront costs Pintard explained.
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