Government lauded for energy reform plans, calls for follow-through

Tue, Jun 11th 2024, 04:02 AM

NASSAU, BAHAMAS — The government was commended yesterday for its "critical and necessary" energy reform plans, with a former Bahamas Chamber of Commerce and Employers Confederation(BCCEC) chairman stressing the need to ensure their implementation.

Businessman Robert Myers told Eyewitness News: "The plan should have been executed by the last administration and the one before that. This administration should be commended for this critical and necessary action. Let's pray that it is action delivered by those employed to carry out the plan and not lip services and excuses."

The government yesterday unveiled its long-awaited plans to address challenges within the energy sector, among them the announcement of a partnership with Island Grid/Pike Energy to reduce energy costs and enhance efficiency within the struggling company.

In unveiling the government's energy reform plans, Energy and Transport Minister JoBeth Coleby-Davis emphasized that the arrangement with Island Grid/Pike will expand infrastructure capabilities beyond what BPL alone can achieve, leveraging the expertise of a generation and transmission & distribution (T&D) specialist to pursue essential upgrades.

Coleby-Davis highlighted Island Grid/Pike's extensive experience spanning over 60 years in delivering top-tier energy infrastructure, with notable projects including work on Walkers Cay, Grand Cayman, Grand Bahama, and Puerto Rico.

"The partnership with Island Grid will drive down fuel costs and enhance operational efficiency. Given the country's growth projections for the next 5-10 years, with a projected 340 million watts of power required for New Providence and 100 million watts for the Family Islands, BPL's existing infrastructure is inadequate," said Coleby-Davis.

She underscored BPL's operational challenges, including nearly $500 million in debt accumulated over less than a decade, annual loan interest payments exceeding $28 million, and a $122 million pension liability. Coleby-Davis noted that BPL operates 29 power stations across 17 islands, with significant portions of its aging infrastructure dating back to the 1980s and early 1990s, exacerbating system losses and susceptibility to climate-related impacts.

"The partnership with Island Grid will facilitate crucial infrastructure upgrades beyond BPL's capacity, addressing generation and T&D deficiencies. Island Grid's expertise, combined with rigorous engineering oversight provided by ECF Consulting, will ensure the successful execution of projects while adhering to international standards," Coleby-Davis assured.

She reassured BPL employees that the partnership would not result in layoffs, with no plans for voluntary separation programs or impacts on existing industrial agreements. Instead, she anticipated the emergence of new roles and training opportunities for BPL employees, with comprehensive communication to address any questions or concerns.

"It is imperative that all employees are engaged throughout this process, with meetings planned to provide clarity and address any apprehensions," said Coleby-Davis.

Minister Coleby-Davis also announced that starting next month, a new Equity Rate Adjustment will make electricity bills more affordable for many Bahamian families as the country transitions to a new era in energy. The adjustment, aimed at creating a more equitable balance in the tariff structure, reduces the base tariff rate for residential consumers. Under the new adjustment, the base rate tariff for the first 0 to 200 kWh will be reduced to zero, benefiting all residential consumers with low and moderate electricity usage.

Additionally, the Commercial base tariff will drop slightly from 15 cents to 14.5 cents, and the Temporary Supply base tariff will decrease from 16.38 cents to 15 cents, benefiting Family Islands particularly. Fuel charges are also being amended to lower charges for the first 800 kWh by 2.5 cents and increase charges above 800 kWh by 1.5 cents, incentivizing energy conservation. These changes will be effective until a comprehensive tariff review is completed and new rates are approved by the government and URCA.

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