Despite a significant fall in global oil prices, don’t expect the Bahamas Power and Light (BPL) fuel charge to fall anytime soon, BPL Chairman Dr. Donovan Moxey said yesterday.
The Utilities Regulation and Competition Authority (URCA) mandates that all fuel costs be passed directly on to the consumer, but that charge was capped last year to “soften the blow” for Bahamians, said Moxey at a Rotary Club of Nassau meeting at Luciano’s.
He said, “When we had the fires last year, we recognized that, obviously, given the mix of fuels that we had to use, that was going to be a significant cost to the customers, so what we at BPL decided to do is rather than immediately passing on costs to customers, we capped it at 19.15 cents [per kWh].”
Moxey continued, “However, the true actual cost of the fuel pass-through was a little bit more than that. It was more around 22 cents, and so what we ended up doing as BPL is we elected to finance that cost so that we can cushion the blow for the Bahamian people.
“Now what URCA has informed us of is that all of those costs need to be passed along.
“So, we put together a process where over time, as the cost of electricity goes down, we will look to slowly pass those costs that we ended up financing as BPL onto the customer.”
A significant increase in the fuel charge came in September after several fires caused significant damage at the company’s Clifton Pier Power Plant.
BPL said this was because of the resulting increased usage of its Blue Hills Power Plant, which produces power from turbines that use higher priced diesel fuel.
The utility company also listed the increase in global oil price as a reason for the increase.
In October, BPL said, “As we move toward the cooler months, we will see a drop in demand and only the more efficient units will be used, resulting in a decrease in the fuel charge to customers.”
However, since then, Bahamians have seen months of cooler temperatures as well as a significant decrease in global oil prices, but still no drop in the fuel charge.
The average residential light bill in The Bahamas increased by 45 percent between October 2017 and October 2018, according to data provided by BPL.
BPL has 93,424 residential customers in the country.
The fuel charge typically makes up the majority of electricity costs for the consumer.
The fuel charge steadily increased in 2018.
In the February billing period it was 14.75 cents per kilowatt hour (kWh); in the March cycle it was 14.9 cents per kWh; in April, the surcharge rose to 15.68 cents per kWh; in May, it jumped to 17.46 per kWh; in June, it was 17.38 cents per kWh; in July, the surcharge per kWh was 19.46 cents; and in the August billing period it was 19.15 cents per kWh.
It has remained there since.
Education: Virginia in Charlottesville, BA in Foreign Affairs and Spanish