By Richard Coulson
Hurricane Matthew played no favourites here, and neither has Bahamas Power & Light (BPL).
From the flats of South Beach, yea unto the peak of Mount Fitzwilliam, darkness has reigned; no Almighty said “let there be light.”
On Friday (Oct 21) Government House ballroom was unlit. The handsome invites for the gala Celebrating Women International had to be scrapped, although dispatched by the Governor-General, Dame Marguerite Pindling.
Unfortunately, the blame lies directly on Dame Marguerite’s own government, inherited directly from her charismatic late husband Sir Lynden. Since her ministers took office in May 2012, we can easily review their record of abject failure in leading us to cheap, reliable electric power—a principal plank in their Charter for Governance election platform.
In 2013, the Prime Minister delivered a lengthy, grandiose statement of how energy supply would be reformed, as developed by his chosen National Energy Task Force. Amid the flow of eloquent generalities, and the standard platitudes about renewable energy (meeting 30% of our total needs by 2030) several specific points can be found about reorganising the Bahamas Electricity Corporation (BEC).
Recognizing that “fundamental realignment would be required”, BEC would be divided into two companies, one for transmission and distribution and another for generation. Although government would retain a stake, other parties would be promptly invited to bid by sending out RFPs (requests for proposals), and initial public offerings (IPOs) would be launched locally. With KPMG Advisory Service on board as principal consultant, all would be wrapped up by 2013 year-end.
As usual with Mr. Christie’s more ebullient announcements, his promises have proved illusory. There is still no government programme for wide generation by solar, wind or waste resources, and the projected reorganization of BEC has been radically revised and down-sized.
By late 2013, it was obvious that any acceptable RFPs were slow in coming, and questions to Minister of Works Philip Davis were being met with evasive answers that the matter was still “under study”. Finally, in early 2014 Minister Davis acknowledged that “we may fall back on doing it ourselves...BEC may remain unified and not split up”, reversing all the earlier analysis and advice by KPMG and a technical advisory firm.
Although PS was a successful, entrepreneurial firm founded by its CEO Sidney Hinton, it took until early February 2016 for the company to sign a five-year management service agreement with government, providing that PS could earn as much as $5 million annually for five years.
I hope Ms. Hill is a lady of stamina, as she has suffered a rocky road ever since her appointment. Beginning at her Chamber of Commerce breakfast introduction, she has been steadily heckled by the feisty Leslie Miller (a former BEC chairman), and union leaders, among others.
This month’s descent of hurricane Matthew was her personal “perfect storm”, as public wrath rose to new heights about “the worst hurricane response in our history”. In fact, Ms Hill's response seems exemplary. Her contact with Southern Co. enabled the speedy arrival of a flotilla of bucket trucks, with drivers and repair equipment, which would still be tangled in red-tape if handled by Mr. Davis’ Ministry of Public Works.
The hurricane should not be used to obscure the fundamental failings of our energy regime, which will continue even in the sunniest weather. The real difficulty lies in financial management. As Ms.Hill herself has stated, BPL is short of current operating funds to improve service and to correct the shoddy maintenance that government, through BEC, has allowed to fester for many years.
Any improvement in service is hamstrung by BEC’s legacy debt of at least $450 million, which certainly cannot be funded by BPL from its own operations. Early this year government authorized a BEC $600 million “Rate Reduction Bond”, but current reports show little success to date in placing these securities, and the technical default of an outstanding $100 million BEC bond was recently announced.
Pamela Hill should be given full latitude for squeezing operating efficiencies into profit for BPL and dividends up to BEC, but it’s hard to see her making substantive improvements and reducing rates in the face of that overhanging debt.
Regrettably, both washed-out South Beach residents and the Government House ballroom may have to endure more nights in the dark.