By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s deputy leader yesterday said protesters were comparing “apples with oranges” in arguing that Grand Bahama Power Company’s tariffs should at least match BEC’s, adding that the former’s newly-approved rate structure “strikes a relatively decent balance”.

K P Turnquest, speaking after the Grand Bahama Port Authority (GBPA) confirmed it had approved GB Power’s new three-year tariff structure until 2018, said it seemed that the energy monopoly had made some “concessions” towards consumers.

The GBPA, in confirming its approval, said 90 per cent of GB Power’s residential customers would now see a reduction in their base rates after the latter revised an initial proposal that called for ‘base rate’ increases in most customer classes.

“All customers of GB Power are seeing their total (all-in) power bill decrease between 7 per cent and 12 per cent,” the GBPA said of the revised rate structure.

“We are pleased to advise that the proposed average base rate increase has been reduced from 3.5 per cent to 1.5 per cent, with 90 per cent of residential customers seeing a decrease in their base rate, which contributes to the increased savings on the total power bill.

“The greatest savings will be seen by low income residents, with both a base and all-in decrease totalling a 12 per cent savings. Residential customers will see annual savings amount between $150 and $500, depending on consumption.”

GB Power had initially proposed a small increase in the ‘base rate’, the portion of the electricity bill that generates all its cash flow and profits, for most customer classes.

This, though, was to be more than offset by a corresponding decline in fuel costs, which are assessed as a pass through to the consumer.

Responding positively to the greater energy cost decrease projected for GB Power’s residential customers, Mr Turnquest told Tribune Business: “We’ve got some concessions from them on the proposed [base rate] increase, and while no one wants an increase, they’ve been able to strike a decent balance all things considered.”

The east Grand Bahama MP said “no one can absorb any increase” in energy costs given the fragile state of the island’s economy, and household incomes, but acknowledged that the reliability of GB Power’s electricity supply needed to be maintained.

To achieve a consistent supply, the utility needs to generate sufficient profits and returns to enable it to invest in the upkeep and expansion of its infrastructure.

“There are some sacrifices that we have to make to ensure that is the case,” Mr Turnquest, a former Grand Bahama Chamber of Commerce president, added.

Pressure groups such as the Concerned Citizens Coalition (CCC) have long used BEC’s lower tariff rates to justify their call for deeper price cuts by GB Power, but the Opposition’s deputy leader suggested this argument might be misguided.

Unlike BEC, which could enjoy an endless supply of taxpayer subsidies, Mr Turnquest said GB Power was a privately-owned company that had an obligation to deliver decent investment returns for its shareholders, 19 per cent of whom are Bahamian.

“I listen to the people who compare the rates in Grand Bahama to the rates in Nassau, and while I understand the issue, the reality is BEC has not made money in a long time,” he told Tribune Business.

“GB Power, being a private entity, can’t fall back on the Government and look for subsidies, and nor should we want them to. You can’t compare apples and oranges.”

Mr Turnquest said he was “kind of surprised” at the timing of regulatory approval for GB Power’s new rate structure, having been “led to believe” this would occur at a later date.

He also praised the focus on biofuels and alternative energy as “a very important step in the right direction”, and said it was now critical for GB Power to deliver on what it has promised for the next three years.

The new rates take effect from February 1, 2016, and Mr Turnquest said: “At the end of the day, we all want lower electricity tariffs, but as long as we’re dependent on fossil fuels, there’s a cost to that.

“The move to alternatives is a more progressive step in the right direction, and will hopefully lead to good results that eventually move us off oil, and the volatility and cost it brings.”

The GBPA, in announcing its approval of the new rate structure, said: “We required the GBPC to focus on low income residential customers, the deferral of future generation investment and the introduction of renewables to their energy mix.

“The new rate structure is returning the cost of electricity to rates that were last seen in 2008, and keeping the rates there for three years.”

The GBPA said commercial and general service large customers will see their total power bills decrease by approximately 8 per cent and 9 per cent, respectively.

“Recognising that the industrial sector is a key economic driver for this island, GBPC has worked with its stakeholders to develop a new large industrial rate that defers future GBPC generation investment,” the GBPA said.

“We are confident that this rate will continue to promote future expansion plans, economic growth and job creation in the industrial sector, while saving customers from a rate increase.”

It added: “To minimise future rate changes to customers, GBPA has approved GBPC’s strategy to utilise renewable energy sources, such as solar and storage technology, to meet the energy needs of customers.

“Over the next three years, GBPC has outlined a detailed plan to execute a number of initiatives that will ensure the cost of electricity continues to be stabilised, and that investment in additional fossil fuel based generation is deferred, thereby, minimising future changes in the cost of electricity.”