Bahamas Power and Light’s (BPL) recent announcement that it intends to sell stations A and D at the Clifton Pier Power Plant to Shell North America has been met with scorching criticism from the business community’s energy industry.
As she noted that the Bahamas Chamber of Commerce and Employers’ Confederation’s (BCCEC) Energy and Environment Committee was “very upset” with Shell North America being awarded the contract for an LNG (liquefied natural gas) plant in the first place, Deborah Deal, the committee’s chairperson, slammed the proposed sale and said it “does not make any sense”.
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.
Minister of Public Works Desmond 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.
“Why would we sell it to Shell if we’ve already done it?” Deal asked yesterday.
“That does not make any sense. It doesn’t make any sense. The whole purpose of having them do it was because we didn’t have the money to physically do it ourselves, but now that we’ve physically done it why would we sell it to Shell? Why not just let Shell do the LNG? To me, it doesn’t make any sense.”
Meanwhile, Bahamas Electrical Workers Union (BEWU) President Paul Maynard called for BPL to “get back” any money it paid for it newest plant from Shell.
“I guess they went the long way around it, because we didn’t have to spend any money. Shell should have been spending the money from the start, that’s what I was saying,” Maynard said in an interview with The Nassau Guardian yesterday.
“What needs to happen is, Shell needs to give the company back the money in full for Station A, and they need to now pay for Station D.”
Deal said the government has failed to be consistent with regard to the Shell deal.
“I guess what I don’t understand is that back in October of 2017, when they did the RFP (request for proposals) for 80 megawatts of backup generation, they ended up choosing Shell as Minister Desmond Bannister said in Cabinet in February of 2018 that the Shell deal was best for The Bahamas,” Deal said.
“He indicated that there would be no financial outlay and the process would be done in a short timeframe, and there would be no outlay because how [the engines] would be paid for would be in the fuel charge to The Bahamas and they were going to have a fuel charge to The Bahamas for like 25 years or something because that’s how they would get paid back, right?”
Deal also questioned why “at the end of the day we’re going to sell it to Shell”.
“But, again, because the stories change – you know, like you hear the minister say one thing, and then the CEO say something else and then you hear Donovan Moxey say something else. What ends up happening, because we’re all human – it makes us think about why is this being done this way,” Deal said.
“And you start speculating rather than just – if you had the facts you wouldn’t even speculate. You would say ‘okay, I don’t like it’, or ‘okay, I like it’ or ‘okay, who cares’.
“But when the information comes scattered and different, it unfortunately does not give you a sense of security that what you’re hearing is true. That’s all.”
BPL and Shell North America hope to have their definitive agreements completed by March, according to Moxey.
Maynard urged the company not to delay the sale, if it intends to go ahead, but said Shell needs to fully reimburse BPL.
“Listen, if that’s what the government is going to do, that’s what the government is going to do. You’re not going to stop them, alright?” Maynard said.
“My point is, my attitude is, that every dollar we have spent we need to get back. And they might as well sell to Shell now. Don’t wait, sell to Shell now.”