Over the past several months, electricity consumers here in New Providence have been forced to endure lousy and lackluster service from the Bahamas Electricity Corporation (BEC). The corporation has failed to provide dependable and affordable electricity and has instead been responsible for the destruction of thousands of dollars in electronics and appliances without offering its customers any meaningful compensation. In fact, island wide blackouts, load shedding and service interruptions have become part of the daily routine. Even in the face of such deplorable service however, the cost of electricity continues to add insult to injury, negatively impact the cost of living for residents and the overall cost of doing business as well.

Even as the cost of fuel on the global market continues to drop, reaching its lowest point since 2008, BEC customers have paid significantly more money on their electricity bills due to a rise in fuel surcharges; a reality which will only be further exacerbated by the implementation of VAT come January 1 of next year. The increases come sadly on the heels of promises by the corporation’s executives that customers in New Providence would see decreases in their power bills. It has become clear that this Christie government is not the least bit concerned about saving Bahamians money on their electricity costs. Instead, public comments from government officials suggest that this administration is interested ONLY in how much MORE money they can make on the backs of struggling Bahamian families.

While in opposition the PLP promised the introduction of greener energy solutions; expressing a need to “get Bahamians involved in solar energy”. Unfortunately the PLP while in government has failed to take the necessary steps to do just that. Plans to introduce solar energy or other less fuel dependent energy sources have apparently been shelved. In fact the corporation, in October of this year dismissed any suggestions of providing concessions to residents who wish to invest in alternative energy with the government questioning: “who’s going to make money from being greener”?

The corporation’s finances leave even more to be desired. According to recent media reports BEC will post a likely net loss of at least $22 million for 2013. Add to that an accumulated legacy debt of 450 million dollars, a dependence of aging and failing equipment, the consistently high cost of fuel, coupled with the impending implementation of Value Added Tax and what we have is a recipe for disaster.

BEC’s failures as a corporation can be traced back to years of mismanagement and improper oversight by successive governments. More than a year ago this PLP administration announced grand plans to finally address the need for energy sector reforms in this country, starting with a revamp of BEC, its structure and responsibilities.

In a statement, Mr. Christie pledged his government’s commitment to reducing the cost of energy, increasing energy security and environmental responsibility, increasing reliability, and increasing competitiveness within the sector. The government further announced its intent to create two new entities; the first of which would be wholly owned by BEC and a second designed to operate under confines of a power purchase agreement with the government. Both entities, according to the PM, would be operated by financially and operationally credible parties or consortiums governed by a series of management agreements. That process was to be overseen by local firm KPMG and completed by May of 2014.

More than a year since making the announcement about the changes at BEC the government has yet to decide on a suitable bidder and is no closer to implementing any meaningful energy reforms. The Deputy Prime Minister has spent months sidestepping inquiries about the bidders involved and the overall process offering NO NEW INFORMATION to the public despite rising concerns about the lack of transparency. Unfortunately, it appears that like with so many other national issues, this Christie led administration has once again shown itself long on promises but short on action.

The limited public information that has been floated around has been released by KPMG. The company recently revealed the government’s intention to scrap the original plan to split the corporation into two separate companies, opting instead to create one new company to be owned by BEC. That new company will then be split into two separate divisions; one for power generation and the other to handle transmission and distribution. The winning bidder will then undertake the work of refurbishing and optimizing BEC assets, and among other things, securing fuel supply agreements in addition to financing new equipment. It is also expected that the new company will have introduce a fee structure based on incentives to help lower the cost of electricity.

As it presses forward with these plans to reduce the cost of energy, the government is in the same breath preparing to UNDERMINE its own plans by giving the cash strapped corporation the right to tack additional fees on their light bills; and once again hardworking Bahamians will be left holding the bag. BEC will in the near future be allowed to divest BEC’s enormous debt burden through Rate Reduction Bonds (RRB). The plan would allow BEC to then transfer that right for fee collection to a newly created Special Purpose Vehicle (SPV). The SPV will issue RRBs that are “securitised” by the revenue stream from every BEC bill and sell the bonds on the capital markets. The proceeds from the sale of the RRBs will then be passed back to BEC, allowing the company to refinance its debt at a lower rate in essence turning it into an asset backed security.

How CONVENIENT! Thanks to this new approach, neither the government nor the corporation and its management will have to take responsibility for their role in the creating the monster that is BEC.

The Democratic National Alliance is baffled by the approach being taken by this administration. It is unconscionable that in the face of VAT implementation and its potential impact on the cost of living, this Christie led administration, which claims to believe in Bahamians would allow that BEC – a corporation known more for its slip-ups than its successes – to throw its financial burdens on the backs of already struggling Bahamians. Such actions do not reflect the mindset of an administration committed to energy reform, or that of a government looking to improve the quality of life for its citizens.

Sadly it appears that the Christie administration will again make a decision which will benefit special interests but have catastrophic consequences for the average Bahamian.

Branville McCartney

DNA Leader