The sorry state of affairs at BPL

On November 6, Minister of Public Works Desmond Bannister tabled the Electricity Rate Reduction Bond (RRB) Bill, 2019 in the House of Assembly. It seeks to repeal an Act by the same name enacted in 2015 by the last Christie government. The bill, if enacted, will give parliamentary approval for a facility through which BPL will borrow $650 million repayable by a charge on consumers’ billings.

Donovan Moxey, chairman of BPL, advised through a press statement that $320 million of the borrowed funds would be used to address legacy debt and another $350 million would be used for modern power generation. The mathematical difference of $20 million was not explained.

Deputy Prime Minister and Minister of Finance Peter Turnquest confirmed that without the funding and related increase in BPL billings to its consumers the government would be forced to increase taxes to pay for BPL’s borrowings.

Two years ago, in August, 2017, Bannister said, in reference to the PLP’s RRB, that the same would not be pursued if it meant an increase in electricity costs for the Bahamian people.

Now an increase in electricity costs no longer matters to the government. And this callous indifference will come on the heels of the worst summer of power outages ever recorded on our capital island.

In April, 2018, BPL entered into an agreement with Shell North America (Shell N.A.) to construct a power plant capable of generating 220 megawatts of power. This was followed by a series of redundancies from among BPL’s senior technical staff and the firing of the chairman and some other members of the board in August 2018.

Between the 7th and the 14th of September, 2018, BPL’s power plant at Clifton Pier was beset by three fires resulting in two large generators being out of service. One engine was destroyed and the other was seriously damaged. In all, some 63 megawatts of generation capacity was lost. A wholly unsatisfactory report on the fires completed in March 2019 blamed the fires on “operator error”.

Also in September, BPL signed a $95 million agreement with Finnish technology group Wartsila for the installation of a new multimillion-dollar 132-megawatt fossil fuel power plant at BPL’s Clifton Pier site. The public was advised that Shell N.A. was aware of and in agreement with the acquisition of the Wartsila generators which would ultimately become a part of the new Shell N.A. Clifton power plant.

The arrival of the Wartsila generators was predicted to reduce the number of leased Aggreko generators providing auxiliary power until the construction of the new 220-megawatt Clifton Plant.

In fact, the number of Aggreko generators had to be increased to compensate for delays in the arrival and installation of the Wartsila generators; their installation was further delayed because necessary site work had not been undertaken.

BPL customers, reeling from a summer of continuous blackouts and still subjected now to periodic power outages, were recently advised that the government approved the purchase of a $30 million generator for BPL’s plant at Blue Hills.

Nothing has been said about how any of these various moving parts will provide a cohesive, permanent solution to BPL’s historic shortfall in generation capacity.

None of the steps taken suggests that BPL is moving away from fossil fuels and toward cleaner, environmentally friendly and renewable sources including solar, wind, and waste-to-energy.

There has been no indication that the government will privatize BPL or even electricity generation, as water production was successfully privatized by the Water and Sewerage Corporation.

And the government has failed to hold anyone accountable for this summer’s fiasco: not the minister responsible, not the leadership of the board, not senior management, indeed, not a single senior power-generating engineer.

Nothing in the government’s or the management of BPL’s recent performance provide any confidence in their ability to address the management and power generation crises at BPL.

The public lost confidence in the board and management of BPL a long time ago.

Keeping electricity generation as a government monopoly is a bad idea.

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