Friday, May 19, 2017
By NATARIO McKENZIE
Tribune Business Reporter
Bahamas Power & Light’s (BPL) middle managers yesterday said they had been ‘left in the dark’ over the former government’s secretive deal with New Fortress Energy, and raised concerns over the future of the utility and their jobs.
Anthony Christie, the Bahamas Electrical Managers Union’s (BEMU) president, questioned “what is the plan moving forward” for BPL, admitting that his members were eager to know what the future could hold regarding their employment.
Mr Christie admitted that the BEMU, which has roughly 100 members, was also blindsided by the Christie administration’s pre-election negotiations with New Fortress Energy, which involved the latter supplying BPL via a 25-year power purchase agreement (PPA).
He said the BEMU was also unaware of the talks, and it only learned of it what was happening from the newspapers.
“What’s been happening is that the Government has still had a hand in the management and oversight of BPL. The Government has been doing a lot of stuff outside and around BPL. If it was looking at power generation, you would think that BPL would have been involved,” Mr Christie said.
“The union would like to be involved when it comes to anything that could impact our members and their jobs. Who is going to run the plant? What will happen to the old plant. Will they use our people or their people? We have their jobs to protect.”
Mr Christie added that the unions also have yet to see PowerSecure’s full business plan for BPL. “What is the plan moving forward? A lot of our staff are becoming senior and a lot can happen in one year. These folks want to know what their future is with the company,” he said.
In a statement outlining the terms left behind by the former administration, ex-deputy prime minister and minister of works, Philip Davis, quoted two prices at which New Fortress would provide electricity.
He said it had offered to supply energy at 13.5 cents per kilowatt hour (kwh) from 120 Mega Watts (MW) of “supplemental”, or additional, generation units that would be installed at BPL’s existing Blue Hills power plant.
And, looking longer-term, Mr Davis said the price of energy supplied from a new 260 MW power plant, also fuelled by liquefied natural gas (LNG) and constructed at Blue Hills, would be 10.35 cents per kwh.
Apart from power generation, the deal appears to give New Fortress significant influence and control over both renewable energy and the refinancing of BPL.
Mr Davis said the terms required New Fortress to construct new liquefied natural gas (LNG) storage and regasification terminals at Arawak Cay and in Freeport.
It will also, if approved, “design, develop and construct an LNG bunkering and transshipment hub” near Freeport. Under an associated bunkering license, Mr Davis said New Fortress will pay “incremental licensing fees of up to $7.5 million annually”.
Other requirements were said to involve New Fortress converting BPL’s existing oil-fuelled power generation facilities on Bimini, Abaco, Eleuthera and the Exumas to burn LNG.
Seemingly taking advantage of New Fortress’s parent, a $72 billion New York-based asset manager called Fortress Investment Group, the Christie administration also agreed that it could “lead and arrange” a $600 million rate reduction bond (RRB) to refinance BPL’s legacy debts and liabilities.
Mr Davis said the refinancing would “improve the Government’s debt-to-GDP ratio”, likely referring to the fact the RRB would replace some $240 million in loans guaranteed on BEC/BPL’s behalf.
New Fortress will also invest $10 million in a “smart grid power management system for the Bahamas”,according to Mr Davis.
The ‘deal’ with New Fortress also brought the company into renewable energy, where it is to partner with the Government to “establish a programme whereby it will sponsor qualified renewable energy projects of up to 25MW installed capacity in the Bahamas”.
“The Government will facilitate all necessary project development activities to support the company’s renewables sponsorship programme, including facilitating such projects and/or providing financeable offtake arrangements,” Mr Davis said of the proposed agreement’s contents.
“New Fortress Energy will work with the Government to develop a workforce optimisation plan (including by conducting an economic impact study) to maximise the employment opportunities of Bahamian citizens in the operation of the projects described herein.
“I am of the view that this proposed agreement is in the public interest and will prove to substantially move all Bahamians forward together.”