The Government wanted Bahamas Power & Light's (BPL) manager to guarantee its facilities would match the operational standards of comparable energy utilities within a year of taking over, Tribune Business can reveal.

A draft copy of the management agreement between BPL, the Bahamas Electricity Corporation's (BEC) operating subsidiary, and PowerSecure shows that the Government wanted the latter to fulfill some challenging criteria in return for a guaranteed $2 million per year.

In particular, the Christie administration and BPL Board wanted the Carolinas-based provider to bring all BEC's legacy generation and transmission and distribution (T&D) equipment up to a reliable level of performance within 12 months of its February 9, 2016, management takeover.

"After an initial period of 12 months, the service provider [PowerSecure] warrants that the owner facilities shall be in such condition and state of repair and maintenance (including having an adequate spare parts inventory) as would be expected of a facility of comparable age and design, which has been operated and maintained in accordance with prudent utility practices for a similar number of equivalent operating hours, and which is located in a similar region of the world," the draft management agreement, seen by Tribune Business, states.

Such a deadline, and requirement, is likely to be extremely tough to meet, given that BPL has suffered several New Providence-wide blackouts and outages already during early summer 2016.

The aged, inefficient generation assets inherited from BEC, in particular, will be difficult to bring up to the standards demanded by BPL's Board and the Government, especially given the lengthy maintenance and repair backlog they have endured.

The draft seen by Tribune Business dates from late 2015, some eight to nine weeks before PowerSecure signed the finalised management services agreement (MSA) with the Christie administration on February 9.

While it is unclear whether the 12-month 'infrastructure upgrade' was ultimately agreed, the final MSA is unlikely to be radically different from the draft, and gives a good indication of both parties' thinking and where they were headed.

Several clauses, though, raise questions about how much autonomy and freedom PowerSecure will have to manage BPL as a business, and whether their efforts will be free from political interference given that the Government has retained 100 per cent ownership of BEC.

For starters, the draft agreement appears to give the Government-appointed and controlled BPL Board the 'final say' over the energy monopoly's disconnection policies.

"The service provider [PowerSecure] acknowledges that owner [BPL] provides an essential public service throughout the Bahamas, and will rely on the performance by the service provider of its obligations thereunder," the draft MSA states.

"Owner acknowledges that this provision does not preclude service provider from disconnecting customers who are in arrears or operating in violation of owner's customer payment or operating policies, once such policies have been approved by the Board and are in accordance with the business plan."

This appears to create the potential for a 'disconnect' between PowerSecure and the BPL Board/Government over how to treat customers with substantial arrears, especially those with the right political or family 'connections'.

Customer disconnections already appear to have provoked a division, with Deputy Prime Minister Philip Davis talking about an initiative to aid 3,000 disconnected BPL customers, yet the utility responding by saying nothing of the kind was in place.

One source familiar with arrangements between BPL and PowerSecure, and speaking on condition of anonymity, said of the MSA: "It's more a consultancy agreement than a management agreement."

Indeed, PowerSecure appears to have far less autonomy and flexibility than the Nassau Airport Development Company (NAD) and its partner, Vantage Airport Group, which are the managers for Lynden Pindling International Airport (LPIA).

The so-called 'NAD model' was said to be the inspiration for the Christie administration's decision to reverse course with its BEC/energy reform process, where it aborted the Corporation's split into separate generation and T&D arms in favour of retaining 100 per cent ownership and finding a private sector manager.

The draft MSA, though, gives BPL and the Government "ultimate authority and control" over all the utility's assets, together with "continuing oversight responsibilities".

The BPL Board has the final say over "the determination of all fees, rates and charges" related to the energy monopoly's facilities and operations. Bahamians have already seen this operate in practice with the Government's rejection, via the Board, of a proposed increase in BPL's base rate tariff.

Youri Kemp, the Democratic National Alliance's (DNA) economics spokesman, in a statement issued over the weekend took issue with the "arbitrary scuttling" of BPL's proposed rate increase by the Christie administration.

"Not only did you go through an expensive and laborious process to have a private company installed to manage BEC, you have now essentially wasted the Bahamian taxpayers' time and resources to go ahead and rule arbitrarily over the heads of that management company and URCA, its main regulator," Mr Kemp said.

Emphasising that the DNA as not against the move, but the way it was prevented, Mr Kemp described the proposed rate increase as "insensitive and ill-timed".

He added that it was even "more startling" that the Government, and not BPL, had proposed the initiative to reconnect 3,000 BPL customers.

"No analysis, no rationale given; no timeline and no phasing mentioned," Mr Kemp said. "Just turn them on, and let BPL sort it out."

Meanwhile, the draft management agreement seen by Tribune Business also shows that the Government and BPL Board wanted "the right to be consulted, review and comment on with reasonable notice, the details and execution of staff redundancies as outlined in the business plan, and other redundancy initiatives which are not in the ordinary course of doing business".

This is the first confirmation that BPL's business plan was examining lay-offs among BEC's legacy workforce, although the former's new chief executive, Pam Hill, recently said she was looking more to redeploy staff than terminate them.

The draft MSA, meanwhile, also gives the BPL Board "the right to review and approve procurement policies for all procurement, including but not limited to fuel supply and equipment purchases, and selection of insurance providers".

Tribune Business understands that the composition of BPL's Board was another key issue in the negotiations between the Government and PowerSecure, with the latter wanting an additional seat for every extra director appointed to represent the state.

BPL's Board is understood to have opposed this, wanting to stick to the original format, where there were eight directors split six:two in favour of the Government.