Cost of electricity to drop via BPL fuel hedgingCost of electricity to drop via BPL fuel hedging
Bahamians could see a slight reduction in the cost of electricity, with Bahamas Power and Light (BPL) announcing yesterday that as of July the fuel charge will drop to about ten cents from about 19 cents through fuel hedging, BPL revealed in a statement yesterday.
BPL noted it was given permission by the government to begin hedging. The company’s Chief Executive Officer Whitney Heastie said in the statement that BPL has already strategically built up its fuel reserves over the past few months and the goal is to now stabilize that fuel cost.
“We now have the physical inventory in place to announce that beginning July 1, 2020, BPL’s fuel charge for customers will be about 10 cents,” said Heastie.
“BPL has now adopted the industry-standard practice of hedging. Hedging is a means of protection against price volatility.
“Through hedging, BPL can now essentially ‘lock in’ a fuel price for a set period of time, bringing unprecedented stability to electricity costs in The Bahamas. We are targeting that 10 cents range, hoping to hold the fuel cost there even when the hedged inventory enters the system in the second quarter of the fiscal year.”
Heastie added that the reduction in the fuel cost will be coupled with base loading of the Wärtsilä Station A at the Clifton Pier Power Station, which will further drive down costs to the customer.
Last summer, Bahamians on New Providence suffered months of load shedding with outages lasting hours every day, as BPL suffered catastrophic failures of engines at Clifton and its Blue Hills Power Station.
Last year it also acquired the Wärtsilä engines and a General Electric aeroderivative gas turbine, providing 34 megawatts of new energy to New Providence’s grid.
Shell North America and BPL are close to finalizing a deal for Shell to purchase the Clifton power plantand eventually introduce liquefied natural gas to the The Bahamas, which is expected to further drive down the cost of energy in the future.