NASSAU, BAHAMAS – Prime Minister Philip Davis yesterday slammed what he described as the Opposition’s false narrative regarding his administration’s energy reform efforts as the privatization of Bahamas Power and Light (BPL), stating: “We have sold nothing.”
During his wrap-up to the 2024/2025 budget debate, Prime Minister Davis, while referring to BPL, argued that his administration had inherited a “mess,” as he contended that the Free National Movement (FNM) had no plan for the ailing company or energy sector reform.
Davis stated: “First of all, the FNM left no plan in place for wide-scale solar to be incorporated in our energy mix in the Family Islands or New Providence. The FNM left no plan or financial structure in place to modernize and upgrade our aging, outdated, and on-the-verge-of-collapse transmission and distribution systems. The FNM also left no plan in place to transition to LNG or any cleaner fuel. As I will talk about later, they rented generators and purchased generators inaccurately stating they were capable of using LNG as a form of fuel. They even put this false narrative on the BPL website. The FNM left no plan in place to tackle the hundreds of millions in legacy debt. They couldn’t even get the ill-fated rate reduction bond off the ground, leaving the government to pay over 20 million dollars in professional fees and nothing to show for it. The FNM left no plan in place to address the $130 million unfunded pension liability. I’m not sure they were even aware of it or had any concerns about it. The FNM also left no plan in place to raise the 500 million needed to bring a new era to our energy infrastructure.”
Commenting on the state of BPL, Davis noted: “We have a power company that is still burning the most expensive and dirty fuels for power generation, with generators that cannot accommodate fuels which emit less carbon, like LNG, and infrastructure that cannot accommodate solar energy. We have an aging and crumbling power grid with limited power generation capacity, requiring load shedding on New Providence and experiencing multiple catastrophic failures through the years. We have ancient crude oil and diesel generators that constantly break down, leaving huge segments of New Providence sitting in the dark. Some of these generators and engines are so old that we can’t even find parts for them anymore to repair them for the next time they break down. As a result of our shortfalls, we rent generators from other companies that cost us millions each year. We have over $500 million in legacy debt — with another $500 million needed for repairs, upgrades, and the purchase of new equipment and infrastructure. That’s over one billion dollars needed to fix this situation,” stated Davis.
Energy and Transport Minister JoBeth Coleby-Davis informed Parliament during her budget debate contribution last week that the government has contracted Pike Corporation via its Bahamian management firm Island Grid Solutions for a 25-year upgrade and management of Bahamas Power and Light’s (BPL) transmission and distribution network. Coleby-Davis disclosed that under a joint venture partnership, the government will own 40 percent of Bahamas Grid Company, with Island Grid Solutions holding 60 percent.
Opposition leader Michael Pintard, however, contended that this amounted to privatization, suggesting that at least $100 million of BPL assets have been privatized. Pintard also queried the government’s removal of the tariff for the first 200 kWh of usage for BPL consumers. Given the utility’s financial strain, he noted the loss of nearly $3 million per month. Also, with increased rates affecting primarily small businesses, he raised concerns about its impact on business costs.
Prime Minister Davis stated that as a result of partnerships entered into by the government, they did not have to sell any assets, privatize BPL, break the company up, terminate any employees, or violate any union agreements.
“We leveraged these partnerships to make BPL stronger,” he stated.
He noted that on July 1st, BPL will introduce an Equity Rate Adjustment, which will adjust rates based on the amount of power consumed.
“This adjustment will benefit all households, as the first 200 kilowatt hours consumed will have a base rate cost of zero dollars for everyone. However, the biggest savings will be experienced by those who consume the least electricity. We will simultaneously roll out a decrease in the tariff rate for fuel costs on electricity bills that will deliver savings for all homes that consume less than 800-kilowatt hours per month. This includes a majority of households,” said Davis.
He further noted: “The average home consumes 655 kWh, which is well below 800 kWh. These changes will produce significant savings for these households, particularly for smaller homes and homes where incomes are below average. This reduction will provide much-needed relief so families can have more money for groceries, school supplies, and other necessities. The money saved will be spent at local businesses, further stimulating the economy. I invite all Bahamians to check your bills at the end of July and see for yourself. Your first 200 kWh will have a cost of zero dollars and your fuel surcharge will go down compared to the month before. Add up the savings yourself. And know that as LNG and solar are incorporated, your bills will go down even more.”
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