NASSAU, The
Bahamas – Fuel surcharge on electricity bills has dropped by some 60 percent.
The Hon. Philip Davis Deputy Prime Minister and Minister of Works and Urban
Development, in his contribution to the House of Assembly November 11,
“celebrated” the decline.
“When
compared to October 2014, the fuel surcharge is dramatically reduced. In fact, the fuel charge is about 60 percent
lower. It was 27.7 cents per kWh in October
2014 and 11.4 cents per kWh in October 2015, he said.
The Deputy
Prime Minister addressed Parliamentarians on the Electricity Bill 2015,
Utilities Regulation and Competition Authority (Amendment) Bill 2015 and the
Electricity Rate Reduction Bond Bill 2015.
In the
process to a “new” electricity corporation, the Government has signed a
Transition Services Agreement (TSA) with PowerSecure, Inc., a wholly-owned
subsidiary of PowerSecure International, Inc.
A Transition
Committee was also announced to move the process forward. Its task was to ensure that all ‘i’s were
dotted and ‘t’s crossed in the work to craft an investment grade business plan
and that the legislative framework was in place to facilitate the Corporation’s
transition.
“PowerSecure’s
five-year business plan for management of the Corporation was developed during
July to September 2015 through a process that involved extensive interaction
with BEC personnel. To assist its
crafting, every Family Island BEC facility was visited. The planning process
was monitored, facilitated, and reviewed by the Transition Committee, with
detailed reviews by advisors KPMG Corporate Finance (on the financial and
commercial side) and DNV GL (on the technical side).
“The plan
will create efficiencies which will further allow for significant and
sustainable reductions in the cost of energy, increased energy security and
reliability, environmental responsibility and increased competitiveness as a
country.”
Mr. Davis
said the Government has also had “very productive” and “advanced” discussions
and received proposals from various blue chip banks regarding the issue of Rate
Reduction Bonds (RRB). The bonds are
“essential” to launch the NewBEC on a foundation of “financial health.”
“We expect
that PowerSecure will set the NewBEC on course to profitability and we look
forward to an improved residential and commercial customer service experience,”
he added.
Mr. Davis
informed the House of Assembly that the Government has always maintained the need
to “aggressively” embrace a “realistic” and “permanent” solution for a viable
future.
“This
solution now allows for significant and sustainable reductions in the cost of
energy, a financially healthy electrical utility company, increased energy
security, improved reliability of service, more responsible environmental
attention and ultimately increase our competitiveness and marketability as a
country. It is a process of true
reform,” he said.
The reform,
he said, is dependent on the passage of the Legislation presented in Parliament
today.
According to
Mr. Davis, the Electricity Bill 2015 provides for the separation of regulatory
and operations functions by the restructuring of Bahamas Electricity
Corporation. It does this by
transferring its commercial operating functions and assets to a wholly-owned
subsidiary company, and establishes URCA as the independent sector regulator.
“The passage
of the Electricity Bill will cause the repeal of the Electricity Act and Out
Islands Electricity Act respectively. It
will provide for diversification in the generation, supply, and distribution of
electricity in accordance with the National Energy Policy, including through
renewable energy sources; and modernize and consolidate the law relating to
electrical installations.
“The new
100% owned operating subsidiary, which is now called Bahamas Power and Light
Company Limited (BPL), will operate under private sector management by a
Service Provider in a manner consistent with this Government’s National Energy
Policy.”
BPL was
incorporated in September followed by establishment of a Board of Directors
headed by Nathaniel Beneby, Chairman.
The Board’s first task was the consideration of a “high quality,
all-encompassing investment-grade” Business Plan, which was presented to
Cabinet last week.
The Deputy
Prime Minister said The Utilities Regulation and Competition Authority Act (Amendment)
Bill 2015, proposes changes in anticipation of the legislation that will
establish URCA as the independent regulator of the electricity sector. It will also enable and facilitate URCA in
discharging such regulatory function in the new electricity supply regime.
URCA’s
primary responsibilities under the new Electricity Bill would be to:
i.
review and approve electricity tariff rates charged to the consumer;
ii.
review of the need for additional electricity generation by independent
power producers;
iii. establish rules and approve
competitive processes where applicable for procurement of power generation
resources conducted by BPL, or any other public electricity supplier, and
ensure such rules are fair, consistent and compatible with the objectives and
principles of the electricity sector and national energy policies;
iv. ensure the efficient operation of
the electricity supply system in accordance with applicable regulations;
v.
review and grant applications for public electricity supplier licences
and issue licences and collect fees from all licensees and public electricity
suppliers sufficient to cover the cost of the regulation of the sector;
promotion and approval of energy efficiency programs;
vi. to publish for public information, prior to
granting approval, the initial and revised renewable electricity plans proposed
by BPL and other public electricity suppliers; and
vii. to protect consumers.