Finally Bahamians will get some relief!
Hon. Philip E. Davis, Q.C., M.P.
Deputy Prime Minister/Minister
30th April 201
MINISTRY OF WORKS AND URBAN DEVELOPMENT
Selection of Preferred Bidder for Management of The Bahamas Electricity Corporation
In the lead-up to the 2012 Elections, the Progressive Liberal Party, by its Charter for Governance, committed to reducing the country’s reliance on fossil fuels and to address the high cost of electricity to consumers. For many years now, consumers have to deal with extremely high electrical bills and far from satisfactory services from an inefficient and debt ridden Bahamas Electricity Corporation (BEC). The protracted and frequent blackouts of this week and last are constant reminders of the urgent need for reform of our electrical generation, transmission and distribution systems.
It is common knowledge that the Government has been seeking a permanent solution to our challenged electrical systems and administration by way of a Request for Proposal (RFP) Process.
This solution proposes to create efficiencies, which will allow for significant reductions in the cost of energy, increased energy security, environmental responsibility, reliability, and increased competitiveness as a country.
Today, I am very pleased to announce that, with the unanimous recommendation of the Task Force appointed to review the proposals and its financial advisors, KPMG Advisory Services, and technical advisors, DNV GL, and as a result of an extensive, robust, and patient process, the Government of The Bahamas has selected PowerSecure International, Inc. as the preferred bidder to manage the New BEC, both generation and transmission/distribution, for a period of five (5) years. This appointment is subject to the negotiation and finalisation of the management contract, the major terms of which have been agreed.
PowerSecure is a public company traded on the New York Stock Exchange (NYSE: POWR) and headquartered in Wake Forest, North Carolina. It has total assets of $265 million, shareholders’ equity of $156 million, trailing twelve month revenues of $257 million (to December 31, 2014 ) and market capitalisation of $301 million (April 29, 2015). It has grown considerably over the last several years posting on average over a 25% Compound Annual Growth Rate (CAGR). In addition, based on its investor presentations, it holds a strong contract backlog of $368 million. Indeed, since January 2014, it has announced more than $400 million in new business.
The company’s largest shareholder is Wellington Management Company, an investment manager with $900 billion under management. Other notable shareholders include Dimensional Fund Advisors, SRB Management, Blackrock Fund Advisors, Vanguard Group, AWM Investment Company, Becker Drapkin Management and other major, primarily US-based institutions and funds.
PowerSecure’s 33-year energy veteran and Founder, Mr. Sidney Hinton, serves as its President and CEO. Under his leadership, close to 1,000 employees across the United States operate and maintain approximately 1 GW of Distributed Generation capacity. It reported 98.4% reliability for these systems in 2014, which is one of the best in the industry. Its three-prong operations take in Utility Services (engineering and infrastructure solutions), Power Generation (distributed energy and solar installation and management) and Energy Efficiency (including production of its own LED lighting systems). The company serves many of the largest utilities in the United States.
PowerSecure specialises in Utility Scale Solar Power through its subsidiary PowerSecure Solar; and has provided both solar and storm hardening services to multiple utility customers. Of particular note is its efficient mobilisation of resources for every named storm in the US in the last 5 years. As recently as January this year, it was mobilised utility support during the severe weather and snowstorms in the Northern United States.
With its credits, the Government of The Bahamas is satisfied that PowerSecure has the technical and financial capacity required to manage the New BEC. We are satisfied that value will be extracted from the existing New Providence and Family Island generation, transmission and distribution assets and that the company can provide the advanced asset management, efficiency retrofits, improved operating schemes, fuel selection and purchasing schemes that are required to set the New BEC on course to profitability. We are very pleased that the company has the ability to manage the building of new, major generation in New Providence; as well as the ability to procure and/or manage the building of renewable energy projects in New Providence and on the Family Islands. In sum, and more importantly, we are satisfied that residents and commercial clients of the New BEC will have the customer experience that we all deserve.
This Government has never questioned the qualification and capability of BEC’s management and staff. We are keenly aware of their material challenges. With this in view, we are confident that the PowerSecure team, in consultation with experienced engineers at BEC, will collaborate effectively to plan, design, procure, and construct generation, transmission, distribution, substation projects, and utility communication projects for the New BEC.
We have always recognised and maintained that energy reform is absolutely critical to the economic development and wealth of our country. We have taken very deliberate steps in this regard. We have adopted the National Energy Policy, amended the Bahamas Electricity Act, and today, we embark on entrusting BEC’s management – NOT ownership – upon a company of excellent repute. Saint Augustine once said that “Patience is the companion of wisdom.” We have been very careful in this decision-making process. We have gained valuable insight during this process that can be utilised for the advancement of our energy sector. We are now ready to put this to use.
We sincerely thank those bidders that were not selected for their broad engagement, contribution to the process, professionalism and patient tolerance of the process. We especially thank our technical and financial advisors, and the Government Task Force, who have all undertaken extensive due diligence on the existing financial and operational conditions at BEC and all of the options put forward by bidders.
With confidence, we now look forward to the establishment of the New BEC under the supervision of PowerSecure. As promised, we are well on the way to delivering to our constituents a 100% Bahamian owned, world class electrical utility, offering its customers affordable and reliable power, and a tremendously improved customer service.