Bannister: BPL facing serious challenges

 


NASSAU, BAHAMAS – As taxpayers mount pressure on the government to address high Bahamas Power and Light (BPL) bills, Minister of Public Works Desmond Bannister yesterday provided a detailed overview of the challenges the power company faces to bring down the cost of electricity, and argued that successive governments are responsible for the more than $91.7 million owed in receivables.

As of the end of October, BPL was owed $91,797,126.

Of that, $48.41 million was owed in arrears.

“I think it’s important to have the truth out there about how we operate a public utility in our country and the extent to which we have allowed it — I am not saying any particular political party; we all have allowed it — to have huge receivables that are outstanding,” Bannister said during debate in Parliament on the Value-Added Tax (Amendment) (No.2) Bill, which seeks to increase the VAT exemption ceiling on electricity bills from $200 or less to $300 or less.

“[We] take it for granted and the company operates in that manner, and we still get very concerned, having regard to where fuel prices were, that we have to pay bills or we are being asked to pay bills.

“We all need to support BPL if we want to have a viable power company.”

According to the minister, the fuel surcharge for December would be 21 cents per kilowatt hour, but BPL will cap the fuel surcharge at 19.15 cents as it has done for the last couple of months to ease the burden on consumers.

Explaining the increased fuel charge, Bannister noted that BPL purchased heavy crude oil at $70.73 per barrel and automated diesel oil at $98.21 in October.

He said, however, the cost per barrel of diesel oil for the Family Islands was $107.87.

Last month, BPL purchased 21,238 barrels of heavy fuel oil.

It purchased 241,743 barrels of diesel oil for New Providence and 79,199 barrels for the Family Islands.

In the last month, global oil prices have dropped from around $79 per barrel to $55 per barrel.

However, BPL officials, including the minister, said that decrease won’t be realized on customers’ bills for several months, as bills in November reflect fuel purchased several months ago.

Bannister tabled documents that showed BPL paid $53.52 per barrel of heavy fuel oil in October 2017, and $40.92 the year before.

In March 2016, the company paid $26.16 per barrel of heavy fuel oil.

In Parliament last week, Englerston MP Glenys Hanna-Martin questioned why the decrease in global oil prices were not being reflected on consumers’ bills.

Bannister said yesterday, “When we look at the what the world markets have priced these commodities at, we get a true feeling and true appreciation.

“When we look at the equations, we get a true appreciation of how these prices are calculated and why we ending up paying what we have to pay.

“So, anyone who wants to be irresponsible in this debate Mr. Speaker, can seek to blame increases on the administration, the government, [but] everyone in this place knows better.

“We have a duty not to mislead the Bahamian public.”

Bannister also explained that a large reason for higher power bills is because customers in New Providence subsidize Family Islands consumers, who do not pay the full cost of power generation.

Additionally, the minister noted that since 2005 BPL has been saddled with a legacy debt of around $500 million.

He said as the minister responsible he has received numerous suggestions for BPL to absorb the cost, but this is not possible.

He also said that over the years government ministries and departments have owed BPL large sums of money and have not paid in a timely manner.

He said the Minnis administration is reigning in on these arrears.

On the generation side, the minister revealed that four of the nine generators at the Clifton Pier Power Station have been out of commission since 2016.

He attributed this to poor maintenance and said they are simply too costly to repair.

He pointed out that another two generators at Clifton were lost in September.

The damaged D11 and D12 generators remain in the hands of insurers.

Bannister said he awaits the completion of that investigation.

He added that as the power company endeavors to address all these challenges, the Bahamian people should practice energy conservation to effect reductions on their bills.