NASSAU, BAHAMAS — Tourism stakeholders have expressed “serious concerns” over the government’s approval for Bahamas Power and Light’s (BPL) to increase its fuel charge.
In a statement, Bahamas Hotel and Tourism Association (BHTA) president Robert “Sandy” Sands said that many are anxious and some are at a loss as to how they will be able to accommodate the increase in the cost of operations.
BPL officials yesterday announced that electricity bills are set to increase next month. Customers using less than 800kWh will see an increase of two cents p/kWh, and those using more power will see an increase of 4.3 cents p/kWh.
Sands said: “We have fielded feedback from stakeholders ranging from significant apprehension to outright anxiety as some have stated they are at a loss as to how they will be able to accommodate the increase in the cost of operations.”
BPL has outlined a schedule of “phased increases” which, for consumers of over 800 kWh represents an increase from 10.5 cents per kWh to 14.8 cents per kWh effective October 1, 2022 to November 30, 2022; with an increase of 4.3 cents per quarter to arrive at a cost of 27.6 cents per kWh as of June 1, 2023 to August 31, 2023, before the rate begins to drop to 25 cents for September 1, 2023 to November 30, 2023.
Sands said: “This is very alarming, particularly for commercial consumers, which encompasses all facets of business owners and operators as they have finally begun to see the sustained recovery of their respective businesses. It is important to remember, at a stage where the potential for growth-beyond-recovery seems imminent, the surety of a successful return to financial viability will be susceptible to disruption or even derailment because of these increases.”
The BHTA said that it seeks the government’s urgent assistance in softening the impact on businesses in The Bahamas, particularly the tourism sector.
“While we recognize there are geo-political global forces that are beyond the control of BPL, and the government, there exists opportunities to mitigate financial challenges that are within the Government’s purview to deploy,” the BHTA statement read.
“The BHTA encourages the Government to consider offering VAT relief applied to the fuel surcharge; beyond the newly announced threshold.”
“The Bahamas Hotel and Tourism Association, with heightened urgency, reiterates its support and encouragement of efforts undertaken by BPL previously to deploy a hedging strategy that would provide the stability and predictability of pricing that we have enjoyed in the recent past.
“The cost of electricity ranks as one of the highest expense items in our budgets due to the fact that operators; particularly in the tourism industry, must maintain a certain level of energy consumption, regardless of occupancy, in order to protect assets, securitize facilities etc. Therefore, it is imperative that we find ways to help alleviate the financial burden this represents,” the BHTA said.
The association said that it encourages the acceleration of efforts to ensure industry stakeholders are able to access alternate sources of energy.
“This is paramount to our ability to diminish our reliance on environmentally unfriendly fossil fuels that contribute to climate change,” the statement read.
“Public and private sector collaboration regarding awareness, understanding, access to capital, and the implementation of policies that encourage off-grid energy alternatives are key to ensuring we do not continue to face such financial uncertainties in the future as it pertains to energy costs. Alternative Energy initiatives and projects must be front and center; we must roll out the red carpet, and roll up the red tape for such projects. We look forward to continuing to collaborate with the public and private sector regarding this important issue.”
Prime Minister Philip Davis said yesterday that the government had delayed the increase given the hardship that Bahamians were facing for the last few years.
“Now that we are past summer, and moving into a period of lower electricity usage, the government has approved BPL’s request for this phased-in increase,” he said adding that it is a short-term measure. For too long, high energy costs have hurt households and businesses alike,” said Davis.
“I know the short-term increases announced today are very unwelcome news. I wanted to be the one to tell you. And I ask you to hang in there just a little longer. Our country is finally on a path to a very different energy future.”
