The average household light bill will increase by $20 to $30 for roughly 10 months next year, Minister of Public Works Desmond Bannister announced yesterday.
The minister didn’t detail how that figure was arrived at.
During his communication in the House of Assembly, Bannister said, “Mr. Speaker, we expect that the issuance of the rate reduction bonds will lead to a temporary increase in the average household billing of an average of $20 to $30 monthly for about 10 months in 2020.
“Sir, unfortunately, this is the price that we all will have to pay because of the proven incompetence of the former PLP (Progressive Liberal Party) administration.
“[T]he good news is that this will be a short-term increase that will be wiped out in 2021 when the cost of generation…
“Listen, Exuma, listen. In 2021, when the cost of generation will decrease drastically due to the completed installation of the second station consisting of even more new fuel-efficient engines, better operation performance, and lower fuel costs brought on by the utilization of Shell’s internationally respected hedging expertise.”
The announcement came during a debate for the Electricity Rate Reduction Bond Bill, 2019.
The bill aims to establish a legislative framework for Bahamas Power and Light (BPL) to raise $650 million through a rate reduction bond.
Bannister claimed the funds acquired as a result of the bond will be used to pay BPL’s debt, upgrade infrastructure and solarize the Family Islands, among other things.
While noting that the power company “performed poorly” over the summer, Prime Minister Dr. Hubert Minnis stressed that the bill was critical in addressing “a poor legacy of a collapse that started at BPL many, many years ago”.
“There has been much discussion of this point,” Minnis said.
“No one likes new costs, but as a mature, independent democracy, we must be realistic as to how development and progress take place. When money is borrowed from lenders to pay for equipment of the past, that money has to be paid back.”
He added, “No one wants the events of this summer in New Providence to be repeated.”
The Electricity Rate Reduction Bond Bill, 2019, repeals a bill of the same name that was introduced by the Christie administration.
It was tabled on November 11, 2015, by then-Deputy Prime Minister and Minister of Works Philip Brave Davis.
According to Bannister, the bill, which was passed during the previous administration, was “poorly drafted”.
“Mr. Speaker, there is no reason, no reason, for any of us to support keeping deeply flawed legislation on this book,” Bannister said yesterday.
“And before members opposite can oppose it, they must answer me on their incompetence in passing legislation with multiple deficiencies in it, and tell the country why we must not repeal [t]his inadequate, poorly drafted, faulty, defective and badly-flawed legislation.”
As a result of the 2015 bill, according to Bannister, there is a “risk that the U.S. Securities and Exchange Commission could require BPL to purchase and retain a portion of the bonds as a result of the bonds being offered to investors in the United States”.
He said that a new section should be added to the new bill “to help bolster the argument that the conditions set forth the SEC’s risk retention rules are met or are applicable”.
The minister raised 16 other issues for which he also made recommendations to correct.
Debate on the legislation continues today.