It would appear that the Shell North America deal with Bahamas Power Light (BPL) is an ever-evolving one under this administration.
Minister of Public Works Desmond Bannister, who has oversight of BPL, released a statement yesterday cautioning that it is “not prudent to court controversy on any issues related to the operations and plans of BPL” as U.S. ratings agencies review and grade the Electricity Rate Reduction Bond.
We cannot be sure, but we suspect the statement is in relation to our editorial questioning the prudence of the chairman of BPL outlining the sale of Bahamian taxpayer assets before any such plan was presented by those in the political directorate.
The minister’s brief explanation of Shell’s current involvement with BPL was light on details yesterday, but welcome nonetheless.
Let us give a concise overview of what led us to this point.
Shell was selected in April 2018, through an RFP process for supplemental generation, to build a 220-megawatt gas-fired plant for BPL at its Clifton site, along with a liquefied natural gas facility to be complete by 2021.
The RFP was put out and accepted by the board this administration originally put in place.
BPL would, according to the RFP, enter into a power purchase agreement with Shell with the promise of buying fuel from this plant for the next 20 years.
This plant was to be paid for entirely by Shell at no cost to a financially strapped BPL.
This turn of events raised eyebrows, but was not hotly debated.
The board then fell apart.
Bannister was sued in the aftermath for his public remarks about the former chairman and two other members.
That matter is still before the courts.
Current BPL Chairman Dr. Donovan Moxey and the new board were installed in August 2018 and signed a memorandum of understanding with Shell in November 2018 with the same terms outlined in the original RFP.
The facilities were expected to be complete before 2022.
However, according to Moxey, after a fire that crippled the Clifton site in September 2018, BPL decided its generation woes could not wait for Shell to address them and commissioned Finnish company Wartsila to build a 132-megawatt tri-fuel plant at station A at Clifton at a cost of $95 million in borrowed funds diverted from their original purposes.
The plant came online last December after months of rolling blackouts on New Providence due to generation shortfalls
But before that, during a tour of the under-construction facility in August, Moxey assured the public Shell was still in the mix.
“The completion of a second gas-to-power Plant by Shell North America will mark the completion of the second phase of our generation turnaround strategy, which will see another 90+ megawatts of high-efficiency, low-emissions generation pumping power to the grid by mid-2021,” said Moxey, confidently.
A few months later, on November 27 of last year, Bannister announced a new plan in the House of Assembly.
The second plant, Bannister explained, would be built not by Shell, but by Wartsila with $70 million of the funds raised from a $650 million rate reduction bond that will be paid back, on as yet to be detailed terms, by all of BPL’s customers — the public.
Nowhere in his address to the Parliament did Bannister mention selling any of BPL’s generation assets to any other entity, let alone a foreign one.
In fact, no one in government did.
But along came Moxey last week to inform us all that BPL would be selling both stations to Shell.
BPL, he said, will still purchase power from Shell, which will produce power from the generators BPL commissioned.
Moxey also said the money from the sale will go toward future BPL upgrades, not to pay down the rate reduction bond which the public was told would funnel well over $200 million toward BPL upgrades.
Bahamians, Moxey said, will, at some level, be able to purchase shares in the companies that sell power and provide LNG.
He did not indicate when the sale will take place or how much the stations will be sold for.
Bannister did not yesterday either.
The Minnis administration seems to want trust from BPL’s customers.
But in light of the constant load shedding and shifting targets of BPL’s board, trust is in short supply.
Full disclosure on the part of the government would be more apt.
Further, the minister should know that U.S. entities, more so than in many other countries, would understand that the U.S. Bill of Rights protects freedom of speech and freedom of the press, just as our constitution jealously protects freedom of expression.
We can assure the minister that we do not seek to court controversy; but we will report on it.
And if there is any controversy to be found in the case of BPL, it is of this administration’s own making.