Chamber laments lack of clarity on use of rate reduction bond funds
Chairperson of the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Khrystle Rutherford-Ferguson yesterday asked for further clarification on Bahamas Power and Light’s (BPL) proposed rate reduction bond (RRB), which will increase the cost of electricity for all of its customers.
“Reliable and consistent power generation coupled with high energy costs has been a legacy issue plaguing this country. As the voice of the private sector, the membership of the BCCEC is not pleased to hear that the cost of electricity will be increased yet again. However, emphasis must be placed on how the funds will be used to fix legacy issues,” Rutherford-Ferguson said.
“The flaw in the process thus far has been the lack of clarity around the use of the funds.”
The Electricity Rate Reduction Bond Bill, 2019 passed in the House of Assembly yesterday.
Minister of Public Works Desmond Bannister yesterday said because of a “quiet period” he could not provide more details on the proposed electricity rate increase.
The bill allows for the government to raise $650 million to refinance its legacy debt, for the completion of phase two of the new Wartsila power plant and for infrastructural upgrades to BPL’s power stations.
During Wednesday’s parliamentary session, Bannister said the average household should expect to pay an average increase of $20 to $30 monthly for about 10 months in 2020.
“If BPL wants to engender consumer confidence, we should be advised of the short- to medium-term and medium- to long-term strategy on how the reduction bond will lead to lower bills in the future,” Rutherford-Ferguson said.
“Ideally, BPL should publish a comprehensive plan on how the use of the funds raised would lead to a reduction in bills, detailing the plan to achieve the same in the shortest time possible.”
Bannister has outlined that new debt refinancing terms would allow for the debt to be fully repaid over a 20-30 year period, as opposed to its current short-term rolling debt structure.
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