NASSAU, BAHAMAS – The proposed $20-$30 charge Bahamas Power & Light (BPL) consumers are expected to pay as a result of an Electricity Rate Reduction Bond (ERRB) may not be ‘set in stone’ Attorney General Carl Bethel suggested yesterday, describing it as “as a short term pain for all of us, for a long term gain.”
Mr Bethel during his contribution to the Electricity Rate Reduction Bond Bill 2019 in the Senate yesterday noted, “When the bond is issued there will be an extra surcharge based on what is set but the figure of $30 was thrown around. I’m not sure that is set in stone. We have to look at the terms of the bonds when they are issued to be able to determine how to spread the load of paying for the fee. That figure has been plucked out of the air as a potential figure, a likely figure but not the figure.”
Works Minister Desmond Bannister previously stated that the average household light bill will increase by $20 to $30 for roughly 10 months next year.
The Electricity Rate Reduction Bond Bill (ERRB), 2019, which will allow BPL to restructure more than $320 million in inherited debt, and secure more than $350 million in new funding to address longstanding issues.The legislation makes clear that BPL’s customer base will be relied upon to service the bond issue.
The purpose of the ERRB 2019 Bill is to establish a legal framework for the organization of the Bahamas Rate Reduction Bond Limited (BRRBL) and the issuance of rate reduction bonds that will be secured by the property or other assets of the BRRBL for the sole purpose of indirect payment and satisfaction of the rate reduction bond financing liabilities.The EERB legislation, which will replace a similar act passed previously by the former Christie administration.
Mr Bethel yesterday noted that an expected 40 per cent drop in electricity costs across the board is expected to mitigate the impact of the charge associated with the bond.
“That is the strategy. It is a short term pain for all of us for a long term gain,” said Mr Bethel.
Mr Bethel also noted that consumers will be protected against any fee fluctuations, unlike the fuel surcharge. “In this Act if there is going to be any change in the rate reduction fee which it will be directly overseen URCA to ensure no overcharging and that the math and calculations are correct. An independent agency will review to ensure the fee imposed is only such as is necessary at the time.”
Mr Bethel said, “Yes we all have to carry a little more load but it is only a little while before we cross this Jordan and reach the promise land of rationalized, cost efficient, dependable, reliable energy that is so vital. One of the biggest complaints about The Bahamas for the investor is the high cost of energy. We are uncompetitive economically and it affects out tourism viability.”