Christie Government Delivers ELECTION PROMISE of Energy Reform for Bahamians…..
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.