Though he did not disclose the finer points of any potential deal, Minister of Public Works Desmond Bannister said yesterday that the details of plans to sell Bahamas Power and Light’s (BPL) stations A and D to Shell North America are still being worked out and the government remains committed to Bahamian investors are being able to have ownership in the generation assets.
“There is ongoing discussion with Shell as to how we structure the final part of the generation matrix that will add a needed insurance policy of generated megawatts and ensure in totality that all our power needs are met,” he said in a statement.
“The BPL Board and Shell are currently discussing a proposal that subject to regulatory approval would give Shell a stake in the company that will own the generating facilities. Bahamian investors will have an ownership stake in the generating facilities and power company.
“The government of The Bahamas remains firmly committed to ensuring that the fullest opportunity will be provided for power prices to drastically decrease; for Bahamians to invest and own a stake in our power generation infrastructure; and for Bahamians to profit from their investment.”
There has been significant confusion in the public over the company’s intended relationship with Shell over the past year.
According to a November 2010 memorandum of understanding the current board signed with Shell Gas and Power Development B.V., Shell would pay for marine infrastructure to receive liquefied natural gas; a gas pipeline to bring gas to shore; an onshore LNG regasification terminal and a new gas-fire 220-plus megawatt power plant.
However, BPL ended up paying for a 132-megawatt plant at Station A at Clifton that came online last December at a cost of $95 million.
Bannister said last month that $70 million raised by the upcoming rate reduction bond would be used to build another 90-megawatt plant at Station D at Clifton.
BPL Chairman Dr. Donovan Moxey said last week BPL plans to sell those plants to Shell and enter into an agreement to buy energy from a new company formed through the sale.
Bannister said yesterday he does not want to “court controversy” as the government tries to resolve longstanding issues at the power company.
“As the ratings agencies review and grade the Bahamian Rate Reduction Bond, it is not prudent to court controversy on any issues related to the operations and plans of BPL,” he said.
“It is important to note that The Bahamas has developed a critical alliance with Fortune 500 company Shell.
“Together we are working closely to forge a lasting energy structure that will resolve the debilitating challenges that The Bahamas has faced after years of mismanagement and poor choices by the previous administration.”