NASSAU, BAHAMAS- A sharp exchange over fuel hedging, infrastructure readiness, and the true drivers of high electricity costs dominated Parliamentary debate on Wednesday, as the Davis administration and the opposition Free National Movement (FNM) sparred over whether a fuel hedge arrangement at Bahamas Power and Light (BPL) delivered real savings—or merely existed “on paper.”
The debate unfolded during consideration of special resolutions related to Banco Santander and Bahamas LNG Partner Ltd., but quickly widened into a broader examination of energy policy, rental generation costs, and the government’s push toward long-term reform of the power sector.
Prime Minister Philip Davis argued that while fuel hedging can be a sound financial tool, the FNM’s strategy failed because it was not aligned with BPL’s operational reality. According to Davis, the hedge was structured around heavy fuel oil at a time when key engines—particularly the Wartsila engines —were offline or unable to utilise that fuel.
“A fuel hedge can be a responsible financial tool when it is aligned with operational capacity and infrastructure readiness,” Davis said. “But if the engines required to use that fuel are not in service, then the savings you project never reach the consumer.”
“The hedge existed on paper,” the Prime Minister added, arguing that favourable market prices could not be translated into lower electricity bills because the system itself was incapable of performing. Financial instruments, he said, “cannot compensate for broken or unavailable infrastructure.”
Opposition Leader Michael Pintard forcefully rejected that characterisation, accusing the Prime Minister and the Minister of Energy and Transport Jobeth Coleby Davis of misleading the public and failing to present documentary evidence to support their claims. He insisted that the FNM’s fuel hedging programme delivered measurable savings and price stability, and challenged the government to “lay the documents” if it believed otherwise.
“When the PLP came to office, BPL did not owe $100 million in fuel charges,” Pintard said. “I challenge the minister and the Prime Minister to produce the bill. Lay the documents and let the Bahamian people examine them.”
Pintard said records showed the hedge produced savings of roughly $30 million and allowed government to maintain a predictable fuel charge of 10.5 cents per kilowatt hour, cushioning consumers from volatile global oil prices.
“The hedge programme did in fact work,” he said. “That predictable price allowed the government to earn a substantial benefit for the Bahamian people. That is documented.”
He further accused the Davis administration of cancelling the hedge against professional advice, arguing that failure to execute a scheduled trade by mid-2022 directly contributed to rising fuel costs and the accumulation of arrears.
“They were advised to execute the trade by June 2022 and they refused,” Pintard said. “When prices went up, BPL could not cover the cost, and that is how arrears accumulated.”
The opposition leader also criticised what he described as a lack of transparency surrounding government-backed borrowing for the energy sector, arguing that ministers failed to present a clear business case for new guarantees tied to BPL.
“If you go to a bank to borrow money, you have to lay out the business case,” Pintard said. “This government has refused to come here and explain why it should again be co-signing for $100 million and $30 million, and exactly how that money will be used.”
The exchange reignited debate over rental generation, with Davis likening prolonged reliance on rented generators to driving a rental car for years instead of investing in a permanent replacement.
“That is the predicament our energy sector is in today,” Davis said, noting that tens of millions of dollars were being spent annually on temporary solutions—costs ultimately borne by consumers and the public purse.
Pintard countered that reliance on rental generation had in fact expanded under the current administration, claiming contracted capacity ballooned from about 56 megawatts under the FNM to roughly 192 megawatts under the PLP.
“For all the talk about reform, the bottom line is 192 megawatts,” Pintard said. “Let them explain that to the public.”
Deputy Prime Minister and Minister of Energy JoBeth Coleby-Davis responded that rising electricity demand—driven by economic growth, construction activity, and expanding business operations—required additional capacity even as the government addressed longstanding structural deficiencies.
“When demand increases in a growing economy, a responsible government must ensure power supply while fixing years of neglect,” Coleby-Davis said.
She added that some rental contracts have since been reduced or restructured into power purchase agreements (PPAs), which she said are less costly and shift operational risk away from BPL.
“That is not an increase in rentals,” she said. “That is a transition to a more sustainable and cost-effective structure.”
Coleby-Davis pointed to the passage of a new Electricity Act, a Natural Gas Act, and the development of the country’s first comprehensive national energy policy as evidence of a deliberate shift from emergency measures to long-term reform.
Despite his criticisms, Pintard said the opposition supports energy reform, diversification, and the inclusion of LNG in the national energy mix, but stressed that oversight remains essential.
“Support does not mean rubber-stamping,” he said. “Energy policy is not abstract. It shows up on every electricity bill. It affects the cost of living, small businesses, and the competitiveness of our economy.”
