Free National Movement Leader Michael Pintard yesterday called on Minister of Works and Utilities Alfred Sears to provide an update on Bahamas Power and Light’s (BPL) hedging program and indicate whether the power company will increase its fuel charge.
While noting that the opposition is “deeply concerned”, Pintard pointed to BPL CEO Shevonn Cambridge’s assertion in The Tribune that an internal review is underway to determine whether there will be a fuel charge rate increase.
He said the situation could have been avoided.
“The FNM left in place the first-ever fuel hedging arrangement for BPL that has led to an unprecedented level of price stability and lowered fuel surcharge rates to the benefit of Bahamian households and businesses recovering from the economic ravages of the COVID-19 pandemic,” Pintard said.
“This Davis administration was made aware by BPL management and board from last year October regarding the need to extend the fuel hedge to lock in as low as possible a price for fuel in an environment where fuel prices had started to increase rapidly. The administration twiddled their thumbs and did nothing at the time.”
Pintard said the government remains indecisive about BPL.
He accused it of being “too busy in receptions and events that do not move the economic development agenda forward in an appreciable way”.
“While the matter has been raised several times now by the opposition, including in the current budget debate, the government has done nothing and this will now inevitably mean a significant increase in the electricity surcharge at a time when Bahamian households and businesses could least afford it,” Pintard said.
“We again call on this government to moderate their incessant traveling, photo-ops and public relations stunts and to take their responsibility for governance seriously.
“We demand that the minister responsible for BPL update the public on what happened with the fuel hedging program and what the failure of the government to extend the program will mean for increased BPL surcharges going forward.”
Pintard also called on the government to reveal how much is being spent on rental generators.
He said it appears to be an absence of a strategic plan to attract the capital needed to address legacy debt, recurrent expenditure and capital works at the power company, which is the main source of electricity for New Providence and the Family Islands.
Sears indicated that he was off island yesterday and did not respond to requests for comment on BPL.
On March 1, Prime Minister Philip Davis promised that his administration will do all it can to prevent an increase in the cost of electricity, arguing that Bahamians cannot afford to be burdened with more taxes.
His pledge came after BPL issued a statement on February 28 stating that the cost of the fuel charge would increase on March 1. BPL recalled the statement the same day.
The following month, Sears said an increase in consumers’ electricity bills is possible.
“The government, as a matter of public policy, intends to maintain the hedge strategy,” he said.
“And, as you know, the hedge strategy is intended to minimize, not eliminate, but minimize the volatility of the fuel price in the global market. The support for the hedge remains.
“But I think that what is important is that as we deal with the short-term challenges that we begin to lay the foundation for a more sustainable future.”
Last July, BPL said its fuel charge will remain at 10.5 cents per kWh until June 2022.
At the time, BPL said that fuel charge was secured in July 2020, when the corporation executed its first-ever fuel hedge transaction.
The Inter-American Development Bank (IDB) assisted The Bahamas in the brokering of its fuel hedging transactions, designed to ease the strain on the government’s budget and allow fiscal headroom during the ongoing COVID-19 pandemic.