By NATARIO MCKENZIE

Tribune Business Editor

nmckenzie@tribunemedia.net

GRAND BAHAMA Power Company yesterday pledged to start “burning compressed natural gas by 2014”, its chief executive calling for support from the industrial sector and other Bahmian islands in a bid to raise volumes to the point where energy costs could be significantly slashed.

Sarah McDonald, Grand Bahama Power’s chief executive, said the ultility monopoly had already executed a Letter of Intent (LOI) with Floating Pipeline Company to bring in the gas from West Pam Beach.

Grand Bahama Power planned to burn 4,000-8,000 mm BTU per day, which would run one of its units and drop consumer fuel charges by around one cent per kilowatt hour (KwH).

Acknowledging that this was not a major saving, Ms McDonald called on Freeport’s industrial companies and the likes of BEC to support the initiative, as this could raise compressed natural gas (CNG) volumes to the point where prices would come down.

Speaking at the Grand Bahama Business Outlook, Ms McDonald confirmed plans to export compressed natural gas from Florida as part of a long term alternative energy plan to reduce Grand Bahama Power’s fuel expenses.

She said the availability of CNG on Grand Bahama could also attract new investors. “We looked at many options, including wind, biomass, solar and inter-connectivity to Florida,” Ms McDonald added.

“We know that renewables are a hot topic. We did consider inter-connectivity to Florida, but for us it looks like that connection is going to be through natural gas. It will reduce our oil prices, which will reduce electricity rates for customers.

“Additionally, the availability of CNG on island can attract new investors or industries that use fuel in their manufacturing process. It also would allow existing customers to convert from higher costing propane or light oil.”

Ms McDonald added: “Our plan is to actually export the CNG from Florida to Grand Bahama by boat. We are starting small. It might not be as people would like, but if we start here we can demonstrate it can be done, then we can start to scale it up.

“In order to get this natural gas we have to get a supply, get the export license and be able to convert or build new assets to burn this gas.

“We have made some great progress. We are going to bring the gas from West Palm Beach, and we’re looking at a piece of land right beside the plant in order to allow us to burn the gas,” she said.

“It’s small in the big scheme of things, 4,000-8,000 mm BTU per day, which will allow us to fuel one of our units. It’s not a huge savings initially. We anticipate it might drop the fuel charge by a cent because we can’t get the best prices with that kind volume, which is where think the opportunities with the other islands and industrial companies come in, because if we can demand a higher number of mm BTU per day we can get the price down.

“We already executed a letter of intent with FPC, Floating Pipeline Company. We know we have the supply, basically. We have the draft term sheet negotiated to deliver up to that 8,000 mm BTU per day for a 20-year term. We will be burning gas in Grand Bahama by 2014.”

Ms McDonald said Grand Bahama Power’s rates were in the bottom third of all Caribbean countries. “The rates here in Grand Bahama are in the bottom third of all Caribbean countries, and we believe we will be able to get that down even lower,” she said.

Despite recent comments by Foreign Affairs and Immigration Minister, Fred Mitchell, singling out Grand Bahama Power for supposedly hiring expatriate workers as a union-busting tactic, Ms McDonald said yesterday that the company was “committed to a Bahamian workforce”.

“Emera and Grand Bahama Power are investing in our employees through training,” she added. “We are committed to a local workforce. We want to work with business and government to find ways to reduce our rates.”

Ms McDonald added that the company has increased its focus on customer service. “There was an audit of our metering and billing procedures by PwC,” she said.

“We initiated a comprehensive customer improvement plan. These included the development of a metering policy and procedure which should be completed by the second quarter of this year. We hired an in-house trainer that is responsible for documenting the procedures and giving related customer training to our customer service staff.

“There are ongoing operational improvements to further decrease the number of customer estimations, which currently stands at about 4 per cent per month. We take our role in the economic recovery of Freeport very seriously, and we are working hard to do our part to encourage growth and stimulate the economy. We have begun implementing a few hedging programmes which will make our fuel surcharge much more stable.”