Authority says Hurricane Dorian had a “disastrous” impact on power company
FREEPORT, GRAND BAHAMA — The Grand Bahama Power Company (GBPC) will levy a “storm recovery and stabilization charge” on consumers April 1, officials confirmed.
The increase has been prompted by Hurricane Dorian, which ravaged the island and Abaco last September – and reportedly cost the GBPC approximately $15 million.
The Grand Bahama Port Authority (GBPA) released a statement announcing the electricity provider had gotten approval to implement the charge.
The charge will result in an additional 1.3 cents per kilowatt per hour (kWh) for residential consumers; an additional 0.8 of a cent per kWh for commercial consumers and an additional one cent per kWh for GSL (industrial) consumers, according to the power provider.
The charge will show up as a separate line item on electricity bills.
“For the average residential customer, it will represent a less than $7 charge on their bills and for the average business customer; $24,” the GBPA statement read.
“This charge does not represent an impact to base rates, but is a full pass-through associated with Hurricane Dorian recovery and an insurance fund for future events.
“GBPA has ensured that there will be clear, transparent management and reporting of the fund. Legal mechanisms have also been put in place to ensure the integrity and protection of funds collected.”
The authority pointed out that with when its news regulatory framework was executed in 2013, a mechanism was included with allowed the power provider to recoup costs associated with natural disasters.
According to the authority, the mechanism was originally scheduled to take effect in 2016 as a self-insurance fund.
However, due to the devastating effects of Hurricane Matthew, the regulator worked with the power company to approve a five-year rate stabilization plan that will allow GBPC to recoup $27.5 million in recovery charges through cost savings on its fuel hedging program.
The rate stabilization plan would have delayed the implementation of the self-insurance fund until 2022 — after charges related to Matthew were fully recouped, according to the GBPA.
However, this was contingent on the island not undergoing another catastrophic event within the five-year period.
Port Group Limited General Counsel Karia McIntosh said: “We have worked with the utility to ensure efficiency of operation, necessary capital investments, and quality of service. With regulatory oversight, this was achieved with no increase to rates since the establishment of the framework agreement in 2013.
“Unfortunately, Hurricane Dorian had a disastrous impact not only to life and property, but also substantially impacted Grand Bahama Power Company’s generating, transmission and distribution assets. The full cost of restoration associated with Hurricane Dorian is approximately $15 million.”
In an internal memo to employees advising of the storm recovery charge, GBPC President and COO Dave McGregor said hurricane costs – like fuel – are passed on and the power company makes no profit on amounts for storm recovery.
“Undoubtedly, there will be a lot of discussion in the media and in our communities about the SRS charge,” he wrote.
“Each of you plays an important role in delivering on our customer’s electricity needs ever day and I wanted you to have the facts. We will be engaging with stakeholders and the media as necessary to ensure complete transparency with our customers so that they understand the SRS charge, and we welcome your questions too. Please contact me or any member of the leadership team for more information.”
Recovery on the island, such as over the bridge and East Grand Bahama, continues following the Category 5 storm, McGregor said.
He noted full restoration is expected to be achieved in May 2020.