Showing posts with label cost of electricity in The Bahamas. Show all posts
Showing posts with label cost of electricity in The Bahamas. Show all posts

Monday, September 15, 2014

Bahamas Electricity Corporation (BEC) is simply a disaster

D’Aguilar: BEC is a Disaster


By Jones Bahamas:



A leading businessmen is urging the government to tackle energy reform.  Super Wash President and member of the Coalition for Responsible Taxation Dionisio D’Aguilar said that today’s electricity costs are twice what they should be and said the Bahamas Electricity Corporation (BEC) is simply as a disaster.

“BEC is in just an absolute horrendous condition.  I’m a former director of BEC.  I was on the board of BEC until the last general election and I can tell you it is a disaster, it is bankrupt and if they won’t tell you, that’s what it is, they have no money,” he said.

Mr. D’Aguilar’s comments came during a recent Rotary luncheon meeting.

He said that BEC is plagued by a vicious cycle and questioned how the power company would support the demand from the upcoming mega Baha Mar resort.

“People don’t pay their bills, you don’t get the parts, so you don’t get money in to buy the parts in order to fix your generators so you can't do advance purchasing, so your generators are constantly down,” he said.

“When Baha Mar kicks in we’re going to be in an even worse position.  When you speak to the people at BEC, their essentially generating what we demand now.”

Earlier this month, customers took to social media outlets to vent their frustration over repeated power outages after BEC experienced three engine failures.

At last report, BEC Chairman Leslie Miller renewed calls for the government to invest in a new $200 million power plant in an effort the meet the increasing demand for electricity.

He also told the Bahama Journal that the power company is looking to bring in more generators to meet the additional demand from Baha Mar.

Due to the numerous engine failures at Clifton Pier, Mr. Miller also said that Bahamians can expect to see an increase in their electricity bills by next month.

“The surcharge is going to go up appreciably due to the fact that we had to rely more on Blue Hill than Clifton Pier.  Every day that we have to rely on Blue Hill over Clifton with the total output at Blue Hill – it cost us an extra quarter of a million dollars per day for fuel, its $10,000 an hour, its approximately $250,000 a day extra that compute out to as much as five sets per kilowatt hour on your next electricity bill,” he said.

In an effort to get the ball rolling on tackling energy reform, last month, The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) along with the Coalition for Responsible Taxation presented the Christie Administration with a report on how the government can efficiently generate energy.

The report lays out an action plan to reduce electricity cost within the next two to three years and the construction of new power plant by 2016.

The report emphasised the critical importance of reducing energy costs in an effort lessen the long term negative effects on disposable income due to the implementation of Value Added Tax (VAT).

15 September, 2014

Jones Bahamas

Sunday, April 21, 2013

Bahamas Electricity Corporation (BEC) is in crisis... ...The dysfunctional state of the corporation is having harmful effects on The Bahamas... ...And now BEC’s debt burden could hurt the country’s credit rating

BEC and the government’s debt position

The Nassau Guardian Editorial


The Bahamas Electricity Corporation (BEC) is in crisis. It has a quarter of a billion dollars in debt the government has to back, it may lose $50 million this year and it is unable to provide enough power to keep the lights on in the high-demand summer season.

Successive political administrations have made all kinds of decisions over the last decade that have brought BEC to its knees. The dysfunctional state of the corporation is now increasingly having harmful effects on The Bahamas.

The high cost of power produced by BEC serves as a large across-the-board tax on Bahamians, increasing the cost of goods and services. The summer blackouts inconvenience businesses and homeowners. And now BEC’s debt burden could hurt the country’s credit rating.

Moody’s is warning the government that rising debt held by public sector corporations such as BEC could hurt the country’s rating going forward. According to its latest credit opinion, The Bahamas retains its negative outlook due to the difficulty in achieving fiscal consolidation necessary to stabilize debt and increase revenue in the short term. A failure to reverse the recent trend of rising debt will place downward pressure on the country’s future rating, the report added, particularly with the “crystallization” of liabilities held by BEC.

The Bahamas’ bond rating was downgraded to Baa1 from A3 last December.

The government says it has 60 energy proposals before it and it is in the process of reviewing those proposals. One of those proposals is from SGI Global Holdings Ltd. It is represented by attorney John Bostwick and thinks a power barge concept makes far more sense than any of the other energy proposals before the government.

Executives from the firm have drafted a proposal arguing it could slash the average cost of electricity from $0.40 per kilowatt-hour to $0.28 per kilowatt-hour (kWh) in the first year if allowed to enter the marketplace. In year seven, the international firm says it could reduce the cost of electricity to $0.25 per kWh.

At some point, the government has to make a decision on the “major change” it will create in the local energy sector. The status quo is a barrier to economic growth, an annoyance to the public and it harms the Bahamian credit position.

If private firms are able to enter the market and assist the government by providing energy at lower rates than BEC, why not quickly move to allow private firms to assist?

We are at the end of the first year of this Progressive Liberal Party (PLP) term. It went by quickly. Despite all the talk thus far about BEC and energy, under the PLP BEC continues to spiral. A paradigm shift is needed in the Bahamian energy sector.

If the PLP waits too long to decide on this change The Bahamas will be further harmed, more money will be wasted and the change desired may not take effect until after the next general election, as energy plants take time to set up.

We hope the Cabinet understands that success in bringing down the cost of power is as much a priority now as our crime and unemployment problems.

April 20, 2013

thenassauguardian