By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Bahamas Power and Light's (BPL) chairman has conceded that increased dependence on its Blue Hills power station, which uses a more expensive fuel, has added to the recent spike in customer electricity bills.

Dr Donovan Moxey said: "The spikes in the cost of electricity are due to a number of factors. We lost some critical assets at Clifton Pier. We lost about 60-70 megawatts (MW) that was used to generate electricity for New Providence. Those were running on heavy fuel oil or bunker C, which is the least expensive.

"We had to shift that load to Blue Hills, which runs on ADO (diesel oil), which is much more expensive than the HFO. With the shift we ended up using more expensive fuel and, right now, our mix is about 70 percent ADO and 30 percent HFO.

"That's what caused the spike in the cost of electricity. We are working on getting other assets at Clifton back online. The assessment is still being done into the fires, and we are also looking at bringing on additional assets in time for summer of next year. Our hope is to shift most of our base load back to Clifton Pier."

Mr Moxey added that the deal with Shell, which calls for the construction of multi-fuel power plant, will bring about lower energy costs for consumers. "One of the largest components of cost for any utility is power generation. One of the reasons we can see our cost coming down is we are shifting the cost of generating power to an IPP, independent power producer," he said.

"An IPP's sole goal is to make sure that power that is generated is in a cost-effective and efficient manner. The second component that will affect cost is the energy that we use. Right now we are using heavy fuel oil or bunker C and automated diesel oil (ADO), which are fairly expensive fuels to use for power generation. BPL is getting out of the generation business and Shell is looking to use LNG, and those are things that go towards cost factors and quite naturally we expect a reduction in cost."

Dr Moxey added that the Shell deal should bring an end to power generation issues. "The power generation assets BPL has, a lot of them have been around 30-40 years. Quite a number are at the end of life. Some of the issues we experienced with blackouts are due to the fact that we have old generation equipment," he said.

"In addition to that there are some issues with transmission and distribution we are looking to fix. When you talk about engaging an independent power producer and doing a PPA (power purchase agreement), it is their job to keep generation running to the agreed level that we have worked with them to establish. If they live up to that we should have little to no power generation issues."

Dr Moxey added that BPL is also working on its revised renewable energy plans. "We are working on the revised renewable energy plans in concert with the project by the IDB, and the goals set by the Office of the Prime Minister," he said.

"We expect to have that plan completed very shortly. We recognise that we are transitioning to having renewable energy in BPL, and we are moving ahead with our Family Island initiatives as it relates to renewable energy."