Power Struggle on Abaco a Reflection of Larger National Issues

 by Larry Smith

BEC is more than a dirty word on Abaco these days.

For months during the busiest and hottest season of the year, the state-owned utility has been unable to provide steady power for the country's third largest economy. This has led to rising anger among the island's 15,000 residents as well as bitter complaints from departing tourists.

Craig Roberts, owner of the Bahama Beach Club in Treasure Cay, said customers were demanding refunds, with some saying they would not return. Peggy Thompson of Hope Town Hideaways, a property management business, said many guests had to either move to cottages with a generator, or were giving up and demanding their money back.

"BEC has effectively ruined our tourist season and that will reverberate for the next several summers. Our visitors are very angry and leaving," one resident told me. "We don't get any information from BEC on anything. They do not want to talk. Everything is referred to Nassau.

The power cuts have been ongoing since May, almost daily and often for as long as eight or 10 hours at a time - occasionally up to 13 hours. And until last week, when the prime minister raised the matter in Parliament, BEC has had little to say about them.

"These interruptions are a problem Abaco is all too familiar with and one that BEC is actively working to improve," the corporation said in a press statement issued last Friday. "The present challenges are due to faults that developed on a few generators, coupled with a shortage of lubricating oil."

But behind that soothing tone lies a disturbing reality. Sources on Abaco say the oil shortage was due to BEC's inability to approve pre-payment for suppliers who are refusing to extend credit to the financially troubled corporation. The latest scuttlebutt is that Shell, which holds the current BEC fuel contract, is owed some $40 million by the corporation.

Last Thursday, BEC had to airlift - presumably at great cost - six 55-gallon drums of lube oil into Marsh Harbour prior to the prime minister's visit on Saturday. This is despite the fact that a local supplier was willing to provide the oil but insisted on a purchase order first.

According to a well-placed BEC source, "literally all hell broke loose at the old plant in Murphy Town on June 13. It is possible the lube oil run-out is reflective of gross negligence on someone's part as suggested by the PM, but there are other possibilities such as late delivery from the supplier, or non-payment to the supplier for prior shipments resulting in a longer than normal delivery time. Many suppliers are now requiring BEC to make advance payment for goods and services because of the corporation's financial situation."

The source also referred to stories circulating in Marsh Harbour that BEC wouldn't fix the old generators because they were waiting for the new $105 million Wilson City power plant to come on stream.

"We are working to get a 1.6 MW unit that has been out for more than a year, as well as two 1.6 MW units that have been out since the fire that destroyed associated switchgear six months ago, back in service," the source told me earlier this month. "A prior reluctance to fix generators in the existing station may be one reason why those engines were sitting idle following the fire."

Meanwhile, the timeline for bringing the new Wilson City plant on stream has been steadily pushed back from the original date of last April. BEC likes to blame the environmentalist opposition to the new plant for this debacle.

According to last Friday's press statement: "Delays and adjustments to the project, initially arising from an injunction being filed to stop construction, as well as subsequent, ongoing litigation challenges and other considerations have resulted in the new plant not yet producing power."

There were three major components to the Wilson City project - a 48 megawatt fossil fuel power plant, a two-mile pipeline from a new fuel terminal in the Bight of Old Robinson, and 20 miles of new transmission lines  to supply electricity to the Marsh Harbour grid. A Salvadoran construction company was subcontracted by MAN Diesel of Canada to build the plant and construction began last September.

After plans to use heavy fuel oil were scrapped earlier this year due to pollution concerns, BEC decided to truck diesel oil to the new plant from the port at Marsh Harbour - so the pipeline was cancelled. There are storage facilities for 2.5 million gallons of fuel at the new plant and observers say about 20,000 gallons a day are needed to operate the new plant. This means hundreds of four-hour tanker truck round trips to fill the storage tanks as well as regular ongoing deliveries to keep them supplied.

BEC has been indicating that one of the new generators will be put online soon. But it was only last week that the Wilson City plant was connected to the Marsh Harbour distribution system for start-up and testing procedures. However, since the contractors need about I MW of steady power to begin testing, it is hard to see how this can happen under the present chaotic circumstances.

On top of that is the fact that the transmission lines from the new plant to Marsh Harbour still have to be upgraded, as they are not heavy enough to take all the new power. However, experts say the existing lines should be able to handle the output from a single generator.

Another critical component is a dedicated communications link from the new plant's control room to the existing plant's control room. This is for coordinating the testing and connection of the new generator. Experts say that bringing a 12 MW generator online must be carefully handled or it will destroy half the electrical items in Marsh Harbour.

So while BEC scrambles to bring one of the four new generators at Wilson City on stream to help resolve their immediate difficulties, completion of the entire project is probably a year behind schedule.

HISTORY
BEC operates 29 generating plants around the country. Installed capacity on New Providence is around 340 MW, with another 100 MW distributed across plants on the family islands. Demand for electricity is growing at 3-5 per cent a year.

The installed generating capacity on Abaco is about 30 MW, comprised of many small units, not all of which are working. Peak demand has been around 19 MW recently, but the difficulties experienced by BEC - and the privately owned Grand Bahama Power Company - in meeting rising demand on our three most populated islands is cause for great concern in terms of the country's economic future.

The original commercial utility on Abaco was Marsh Harbour Power & Light, started in the 1950s by local businessmen Chris Roberts and Lucien Stratton when the island first began to develop. In the late 1960s this operation was acquired by an American engineer named Phil Ferrar, who renamed it Abaco Electric.

Private power stations were also set up on Man o' War Cay by Vernon Albury, on Green Turtle Cay by Bill Elden, at Cooper's Town by Joe Sawyer, at Crossing Rocks by Frank Hepburn, and at Treasure Cay. Grand Cay was supplied by the developers of Walker's Cay. Elbow Cay was supplied by Abaco Electric.

All of these operations were gradually acquired by BEC, beginning with Cooper's Town in 1975. The main utility - Abaco Electric - was acquired in 1987, when the owner was operating on a year-to-year franchise.

"I don't know of any private producers that wanted to get out of the business," one oldtimer told me. "They would have stayed on if they could have gotten better franchise terms. My recollection is that government pushed the issue of nationalization. But some systems were marginal in terms of infrastructure, so perhaps this consolidation by BEC was necessary."

People often point to the success of the privately owned Spanish Wells power company when discussing these matters. But that company provides power for a single affluent community. And although by most accounts it is super efficient, it nevertheless charges a much higher rate than BEC's out island rate, which is subsidised by consumers in Nassau.

On Abaco, it is unlikely that private operators would have invested in expanding their systems into remote communities. Each operator serviced his particular area and expanded into nearby areas where there were sufficient paying customers. But BEC services all these communities - except for the predominately expatriate village of Little Harbour, which is powered by solar panels with backup generators.

That is, of course, the main argument for a public utility. But BECs bureaucratic and uncommunicative approach to its customers, its amazing operational inefficiencies, union featherbedding and financial irresponsibility are more than enough to justify a major overhaul and rethink of this state corporation.

THE SHERROD CHARADE
The Shirley Sherrod story is an indictment of US President Barack Obama any way you look at it, in the view of his craziest critics.

First, there was the affront that a black public official was promoting discrimination against white farmers. It was caught on tape, so what was Obama going to do about it?

Then there was the rush to judgement that led to Sherrod's hasty firing July 19 based on a doctored YouTube video of a speech she gave to the NAACP. So why did Obama allow that?

There are so many dimensions to this story that it's hard to choose among them. But let's start with the woman herself - Shirley Sherrod, director of Rural Development for the US Department of Agriculture in Georgia until last week.

Her father was the victim of a hate crime in 1965. A Baptist deacon and farmer, he was shot to death by a white neighbour, and no charges were returned against the shooter by an all-white grand jury. There are scores of similar unsolved deaths from that era.

Then there's Andrew Breitbart, the right wing commentator who published the doctored Sherrod video on his website (Biggovernment.com). His posting of the video was part of a tit for tat cultural war, with each side accusing the other of playing the race card.

The NAACP and others complained about anti-black racism in the conservative Tea Party movement, so the Sherrod speech excerpt was published to make it appear that the NAACP supported racism against whites.

Breitbart claims the charges against the Tea Party are part of an effort to discredit the movement prior to the November mid-term elections. Opponents accuse Tea Party activists of trying to "delegitimise" the elected US government - about a third of it's supporters believe Obama is a foreigner who is moving the US towards communism.

The administration's hasty reaction to the Sherrod video is a telling indication of the vitriol that permeates media coverage of American politics these days. It was apparently an attempt to head off a right-wing barrage on cable news channels.

Meanwhile, the history of the USDA itself is just as incredible as the deliberate smear campaign that led to Sherrod's forced resignation. Massive financial settlements have been reached in lawsuits filed by minority farmers alleging discrimination by the agency over many decades.

The fact that a doctored video designed to create an outcome became the news of the day demonstrates the validity of some time-honoured advice to journalists - if your mother tells you she loves you, check it out first.

Comments

[Noel Rodman]

Seems like The Bahamas could benefit from Solar Power from all the small roof tops, adding free sun power to BEC's grid system. Why won't the Bahamian Government allow Net Metering and start down the path to freeing Bahamians from Oil and "Oil Lube" for turbines. How bad does it have to get before we start using alternative sources to supplement our already broken grid system?

[Chris Armaly]

Good article with some very good points.

What I will add, is that BEC should not have any financial constraints period. After all, the 3rd highest rate in the civilized world should alleviate cash restraints but all it has done is slowly erode the working middle class family.

How is it possible that one of the generators has been out for more than a year? I'm surprised they even admitted that. Management heads need to roll as there is no excuse for that.

On a side note you might want to check with BATELCO, as sources have suggested Mr. Ingraham had to draw down on their account (something to the tune of 20+ million) to pay for the fuel bill to Shell).

We will now be at a rate of some .35 cents + per kilowatt hour some 300% more than the island of Barbados. Anyone who champions the plight of the middle class must be willing to hold the government's feet to the fire on this one.

I have spoken with numerous hotels, golf cart rental companies etc. Their business has been down for the year more than 20%. If that is the case, the demand for power shouldn't be as strong, making the outages even more inexcusable.

Car registration: I feel you need to cover something on this as well. As I understand it charges are going from some $135-$150 to $500+ dollars (some 400%!!!!!). Now if some private business or enterprise did that in the Bahamas, price control, Bahamas Gov't etc would do all they could to shut them down and the press would be all over that story. I suggest the media should have the same standards with Bahamas Government as they are increasing the load on average Bahamians but yet removing services.

As for your last point I tend to be on the fence here. If a white person made any sort of comments like that to a forum, he/she would be taken out and shot - no if's ands or buts. There is certainly a double standard.

Once again good article.

[Lynn Gape]

Good research, once again Larry!

[Victor Patterson]

Very good article. Being in Abaco, of course I am feeling the frustration that we all are. However, there is not doubt that the environmental protests did slow BEC way down. They were going full out with construction before that all blew up and since then, it's been moving at a crawl. It's not a coincidence - when people are looking over your shoulder ready to pounce on you for anything you might pass over, you are going to have to carefully dot every 'i' and cross every 't'. That might be worth it for some people - I suspect the average Abaconian would have rather that they pushed ahead. Government regulations are always cumbersome.

As for comparing BEC to Barbados or other islands as a poster above me did, this it totally unfair. Barbados is one island as are nearly all of the other nations in our part of the world. BEC's challenges are unique in having to service so many far-flung communities on our archipelago and with only a small population base to earn revenue from. I'm sure there are some things that can be fixed at BEC with regard the way it's run, but let's not downplay the logistics of what the company has to manage.

[Caned]

When in the history of Bahamian government projects has anything been finished on the exact date they said it would be?

No really, if it has happened please tell me.