NASSAU, BAHAMAS – Works Minister Desmond Bannister told Parliament yesterday the Bahamas Electricity Corporation (BEC) suffered forgone revenue loss of nearly $1 billion between 2004 and 2019, which he blamed on an ‘ill advised’ tariff cut in 2003.
Bannister said that prior to that, BEC was making an average annual profit of $16.6 million dollars.
He made the revelation during debate on the Electricity Rate Reduction Bond Bill 2019.
“The final years of the second FNM administration were good for BEC’s profitability until the PLP’s ill-advised lowering the tariff in 2003 just as the energy crisis hit us,” Bannister said.
“There could never be a better case for bad timing. Shortly afterwards, BEC started to lose money and BEC lost money and BEC lost more money.
“From 2004 to 2019 BEC and BPL’s forgone revenue loss was $983,165,066.54. Almost a billion dollars in projected revenue was lost directly as a result of the decreased tariffs. Had those tariffs not been lowered in 2003, BPL would never be so financially challenged today. ”
According to Bannister, BEC had its “biggest loss in history” in 2013. That year, BEC lost $58 million dollars.
Further underscoring the challenges at the utility, Mr Bannister noted of the utility’s 17 engines two oldest were purchased in 1960, with one having been decomissioned and used for parts to keep the other operating. The others were purchased between 1982 to 2013.
“To add to all of these challenges, in 2016 leading up to the elections the PLP hired 166 people at BPL, even though the year before, in 2015, their business plan indicated that the company was overstaffed,” said Bannister.
Last May, BPL announced a voluntary separation exercise to ‘rightsize’ the company which at the time had over 1,000 employees.
Bannister previously told Parliament that BPL would pay out $70 million to 314 employees who accepted the VSEP offer.