PM eases the pain (for some) on bills


Deputy Chief Reporter

AS public discomfort continues over the spike in electricity costs, the government will temporarily increase the value added tax exemption ceiling on Bahamas Power and Light bills, Prime Minister Dr Hubert Minnis announced yesterday.

Parliament has to approve the measure first, then the VAT exempt ceiling will increase to $300 per month until the end of next June. 

This change will be made effective next month and be seen in BPL’s January billing cycle.

The ceiling for VAT exemption on electricity bills was set at $200 during the 2018-2019 budget debate earlier this year.

Noting the undue burden electricity costs have put on citizens, Dr Minnis further assured Bahamians that he remained resolute regarding the need for this country to substantially reduce its energy costs.

Pledging his government would continue to explore the cost of energy, the prime minister said a substantial transition to solar and other renewable energy supplies will be made.

“Given the circumstances that have given rise to the temporary spike in the fuel surcharge component of consumers’ electricity bills, the government is mindful of the impact that this increase has on all Bahamians but especially on the poorest and most vulnerable,” Dr Minnis said yesterday in the House of Assembly.

“This situation is a legitimate issue for every Bahamian. However, there are a small few who are seeking to make political mischief out of a serious situation who know full well the set of circumstances that have built up over several decades that have led us to this point – and who also know that this administration is the one that is putting in place the plan to address it.”

He continued: “You would recall that the government in the 2018-2019 budget provisions made allowance that would exempt Bahamians whose monthly bills were under $200 from the payment of VAT. This was and remains a deliberate policy initiative to assist Bahamians of modest means.

“This recent temporary spike in fuel surcharge has unfortunately put a number of the qualifying customers over the $200 threshold. Thus, I today advise the honourable House that the government will be moving an amendment to the law to allow for a temporary increase in the VAT exempt ceiling from $200 a month up to $300 per month through the end of the fiscal year – that being June 2019.”

He said changing trends in the cost of the delivery of electricity will inform any decision to extend the increased exemption ceiling into the new fiscal year, beginning July 2019.

Dr Minnis also told House members he requested Works Minister Desmond Bannister, who has responsibility for BPL, and the power provider’s team to review and report to Cabinet the full range of options to the government to address this temporary spike in electricity bills.

Fires at BPL’s Clifton Pier Power Plant in September have led BPL officials to rely heavily on the Blue Hills Power Plant from where, he said, 70 megawatts of power are being syphoned to satisfy a generation deficit.

The prime minister highlighted this issue explaining the Blue Hills plant uses a more expensive fuel than the Clifton facility. However, he said, Mr Bannister, who was absent from yesterday’s sitting, is expected to make a full report on energy matters.

Earlier this week, the minister blamed international gas prices for the escalating cost of electricity, but, he said, BPL has worked out interim solutions until Bahamians begin to reap rewards from the Shell North America agreement.

Mr Bannister at the time refused to go into great detail about burdensome electricity costs and when there could be some relief, but insisted the power provider had been forced to grapple with issues out of its control.

Last Friday, the country was said to be one step closer to lower energy bills and more stable electricity generation with the signing of a memorandum of understanding between BPL and Shell North America for an integrated LNG gas-to-power project.

However, it is not clear whether consumers will feel the impact of the company’s transition to liquefied natural gas this term as the project, which features a 220-250 megawatt (MW) power plant is not slated to be completed until the “early 2020’s”.

Shell officials were also unable to offer any estimates as to how much it planned to invest on the project, stating it was too early to tell.