Grand Bahama Power Company (GBPC) highlighted three key investments included in its rate filing which form the basis of its proposed rate adjustments for residents and businesses on Grand Bahama.
During a town hall meeting yesterday – which is a part of the 45-day consultative period required by
regulator Grand Bahama Port Authority (GBPA) – GBPC revealed that in addition to its five megawatt (MW) solar plant that is planned for construction in late 2022 and early 2023, it is also implementing automatic metering and an energy apogee advisor system.
“For solar, they have proposed a small investment in utility scale solar plants, 15 percent generation from renewable sources by 2026. Phase one includes a 5 MW plant in late 2022 and early 2023, there’s also two IPPs (independent power producers) under review late 2022 and early 2023. For the automatic metering, this allows for remote reading and operating of customer meters, real-time billing and outage information to the individual customer,” GBPA Chief Financial Officer Deann Seymour said.
“They are expecting to install 5,000 meters by the end of this month, with the remaining 75 percent to be installed in 2022. The energy apogee advisor is an interactive tool that provides homeowners with customized information on ways they can lower their energy use at home.”
GBPC is proposing a 3.2 percent decrease in base rates for residential customers that consume fewer than 200 kilowatt hours per month. The power company said that would impact about 18 percent of its customers.
For residential customers consuming 201-350 kilowatt hours (kWh) per month, there is no change in base rates proposed. This segment represents about 24 percent of residential customers, however residential customers consuming between 351 to 800 kWh per month – representing about 32 percent of customers – will see a base increase range from one percent to 7.5 percent.
Customers consuming more than 800kWh per month will experience a base increase of 7.5 percent to 8.9 percent, representing 26 percent of residential customers. For other customer classes, general service large customers will experience increases of 3.5 percent to four percent and commercial customers will see an across-the-board increase of 4.4 percent.
Asked during the town hall meeting why the GBPA would allow a rate increase at such an economically depressed time and in the middle of a pandemic, GBPA President Ian Rolle stressed that the final decision will take into consideration the concerns of the public.
“The Grand Bahama Port Authority has not approved any rate increase at this particular time. As with the regulatory agreement that’s in place the power company is required to submit a rate base application to us – which they have done and we are currently reviewing it – and also meet with various stakeholders and have events like this town hall meeting to discuss and draw questions from the audience,” he said.
“I also want to state that we take our role very seriously in Grand Bahama, in terms of protecting customers’ needs and also balancing the fact that the island needs a viable and healthy utility company.”
GBPC has stated that its framework for a rate increase is based on a cost analysis model needed to maintain the company’s operations.
GBPC Vice President of Legal Affairs Karla McIntosh said back-to-back severe hurricanes in recent years have caused an increase in operating costs that must be addressed.
“When we look at the revenue requirement of GBPC in 2018 it was $61.7 million. When we look at the proposed revenue requirement for this filing we will see it is $66.5 million, which is an increase of $4.8 million. As noted this increase is in respect to the insurance expense which from 2018 moved from $2 million to $4.3 million,” she said.
“And then if you look at the amortization of the regulatory assets, they are now proposing to resume that and that is $2.3 million. So those are the two factors that are making up the increase of 4.8 million. So GBPC’s costs have increased and as a result this has resulted in the proposed increase to the customer bills.”
GBPC also provided a summary of its sales forecasts for the next three years.
For 2021, GBPC expects to sell 273,270 mWh, it is projecting 282,315 in 2022; 293,532 in 2023 and 300,990 in 2024 as it anticipates an incremental increase in commercial sales.
“The projected sale of megawatt hours is pretty much conservative. However we are hopeful that a number projects can come on stream to increase these hours,” McIntosh said.
GBPC applied to the GBPA on September 23 for a tariff application.
The power company noted it hasn’t filed a rate adjustment application since 2015 and given its challenges in the aftermath of Hurricanes Matthew and Dorian, a rate adjustment is necessary.