NEW PROVIDENCE – Bahamas Power and Light has been made aware of inaccurate
statements made in today’s local media, regarding BPL’s hedging strategy.
We wish to advise the public that the corporation’s hedging programme remains in
place.
Several members of the media based their analysis and commentary on an erroneous
assertion that the hedging programme had been stopped.
It was not stopped. It continues to this day. We ask that members of the media correct
any inaccurate reporting and base future analysis on facts.
Background
In 2020, the government entered into a partnership with the Inter-American
Development Bank to create a new hedging instrument that would stabilize the price
of the nation’s fuel supply.
The projections for savings were based on an ideal mix of fuel, which included the use of more affordable Heavy Fuel Oil, as well as more expensive diesel.
The hedge was never intended to cover the entire supply. It was only intended to cover a portion of the volumes forecast, which BPL continues to generate savings from.
Due to external factors, such as the Clifton Plant Fire in 2018, and issues with the rollout of the Wärtsilä engines, the more affordable fuel could not be used in the amounts anticipated. As a result, costs ran higher than projected.
Consequently, while the hedge remains in place, it has not delivered the savings initially projected.
Bahamas Power and Light is currently engaged in a number of activities to reduce and stabilize costs associated with the fluctuating price of oil, including the exploration of additional fuel sources and investments in renewable energy.
The Bahamian public can be assured that Bahamas Power and Light is working closely with the government to address the historic issues that have led to the high cost of local energy generation, to deliver a long-term solution for the nation.
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