If Bahamas Power and Light (BPL) does not increase light bills, the government would have to raise taxes to deal with the power company’s debt, Acting Prime Minister Peter Turnquest said yesterday.
“Unfortunately, the cost of that fix is significant and in order to meet that, BPL, as a stand-alone corporation, has to raise the money,” Turnquest said.
“Otherwise, the taxpayers, the shareholders of the corporation, will have to inject the capital as equity. If we inject the capital as equity, it means that our tax bill will go up because we have to recoup that money.
“If BPL does it on its own, it then has to cover the cost of operations and the reserves that I mentioned and the cost of maintenance as well as pay back to…the lenders that will lend the corporation the money to do what it needs to do to rectify the problem.
“Other than that, we consider privatization of the entity and push the problem into the private sector. Either way, the consumer is going to have to, unfortunately, bear the cost of the operation of the entity.”
On November 6, Minister of Public Works Desmond Bannister introduced the Rate Reduction Bond Bill in the House of Assembly.
BPL Chairman Dr. Donovan Moxey said electricity consumers should brace for additional charges to their bills.
The move comes as BPL attempts to tackle its more than $300 million debt.
On Wednesday, Progressive Liberal Party (PLP) Deputy Leader Chester Cooper slammed the government for allowing BPL to increase light bills following Hurricane Dorian.
After a summer of blackouts, “no one wants to pay BPL a red cent more”, Cooper said.
“I don’t like this new BPL tax,” he said.
“It is an affront to Bahamians and could threaten to drive us into another recession. How could they possibly think higher bills make any sense? I guess it’s the people time.”
However, Turnquest shot that down yesterday.
“It’s obviously a ridiculous assumption or statement because the fact of the matter is, as I just explained, this is a cost and a fee that is being imposed by BPL,” he said.
“It is not a tax. It is a real recovery of cost.”
Turnquest added, “…The reality is this is not a new issue and to fix it, unfortunately, costs money. How do we raise that money?
“There’s only through, one, designing the proper solution; two, financing that proper solution; and three, ensuring that we have qualified and the right people involved to install it and thereafter maintain it and to provide for the kinds of reserves to ensure that this problem does not reoccur.”
As a result of a generation shortfall, BPL consumers across New Providence suffered through load shedding exercises for roughly six months this year.
Prime Minister Dr. Hubert Minnis called the situation a “crisis”, although he has clarified that it is not an energy crisis, but rather a crisis for the people forced to deal with the outages.
In August, Turnquest, who serves as minister of finance, declared that the government will spare no finances to find a short-term solution to load shedding.
The following month, Bannister told The Nassau Guardian that Cabinet had approved the purchase of a 30-megawatt general electric engine to assist with the power generation issues.