NASSAU, BAHAMAS — Bahamas Power & Light’s (BPL) hedging program remains in place Latrae Rahming, Director of Communications in the Office of the Prime Minister has confirmed, noting that the hedge as constructed only covered a portion of the company’s fuel and will continue to do so until next year.
Rahming said: “It is important to note that the hedge is still in place and delivering savings to BPL. The hedge as constructed only covered a portion of BPL’s fuel cost and would continue to do so until next year. The Government is not waiting for the hedge to expire prior to finding a solution and is now working on operational and financial solutions to provide long term relief to electricity consumers.”
He added: “There are a couple of mitigating factors which makes this adjustment much more difficult that it would have been in normal circumstances. These are the fuel mix between LFO and HFO. While the use of HFO has increased recently, the skewing fuel usage by BPL to LFO (diesel) has added to the fuel cost.
“More importantly, the impact of the fire has probably cause BPL an additional $50 million in fuel cost at a time when HFO cost was at historical low. This money could have been used a cushion against the impact of the rising cost of fuel which we are now currently experiencing.”
Free National Movement Leader Michael Pintard as recently as this week reiterated calls for the government to provide an update on Bahamas Power and Light’s (BPL) hedging program introduced for the first time ever under the Minnis administration and indicate whether the power company will increase its fuel charge.
Last July, BPL said its fuel charge will remain at 10.5 cents per kWh until June 2022. At the time, BPL said that fuel charge was secured in July 2020, when the corporation executed the fuel hedge transaction.
