By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Multiple Grand Bahama businesses and residents could be “victims of a fraud” that may have cost the island’s sole electricity provider millions of dollars, it was revealed yesterday.

Grand Bahama Power Company, describing the alleged “energy saving devices” at the centre of its probe as “fake”, said the electricity cost reductions at premises where they had been installed were only achieved by bypassing or tampering with the meter.

And GB Power’s regulator, speaking out for the first time last night, said its own investigation had revealed that all the work and installations performed by the company selling these devices “was unpermitted” and “executed outside the scope of their licence”.

The Grand Bahama Port Authority (GBPA) urged homeowners and businesses to contact its Building and Development Services department if any so-called “energy cost saving devices” had been installed at their location so it could ensure the work was permitted and compliant with the building code.

Freeport’s quasi-governmental authority confirmed that GB Power contacted it after a recent meter audit revealed “a number of suspected electricity diversions at several businesses within the Port area”.

“As a result we immediately began our own independent investigation into this matter, which is currently ongoing,” the GBPA said. “Thus far, we can confirm that all of the work performed by the licensee [of the GBPA] was unpermitted, and was executed outside the scope of the licence.”

The controversy resulted in GB Power cutting supply to the Cooper family’s fast food franchises for almost an entire week (they were restored last night), while Sav Mor Drugs, the largest pharmaceutical services provider on Grand Bahama, was another to experience similar treatment and be forced to run on generators while the utility carried out its investigation.

Tribune Business knows who installed the “device” at the Coopers’ KFC, Burger King and Pollo Tropical franchises, but has chosen to withhold his name for the moment as numerous sources said he has “gone to ground” and cannot be located.

However, many of his clients are now faced with having to pay GB Power significant sums in compensation for electricity which they have used but not paid for as a result of his actions. While the businesses and homeowners involved may be blameless, Tribune Business was told that - under the Electricity Act and Freeport’s bye-laws - responsibility for paying up falls on them.

GB Power, in its statement yesterday, said some of the so-called “devices” were simply boxes containing wiring that did nothing at all, while purported capacitors were just boxes filled with sand and dirt. It produced photographic evidence of what it had uncovered.

“This makes the fraud even more unethical,” one energy source, speaking on condition of anonymity, told Tribune Business, “because these people were being sold a bag of fruit juice, magic fairy dust. There’s not even any electrics in it.”

Asked how much this could have cost GB Power, in terms of amount of unbilled electricity and the dollar value, the source said: “I would say it amounts to the millions, across the spectrum, especially if you have high-end people and wealthy second home owners using it in their homes.

“They’ve [the installers] been bypassing the meter box, and are in a heap of trouble. The businesses and residences could claim and feign ignorance, but they’re still going to be liable for the loss suffered by the Power Company because they were the beneficial recipients, in effect, of stolen goods.”

Impacted businesses and residents will now likely have to negotiate financial settlements with GB Power to compensate the utility for electricity which was consumed but never paid for, creating an unwanted burden for many in an economy that is still trying to recover.

Tribune Business’s source revealed they, too, had been offered “energy saving devices” in the past but, realising they did very little, rejected their installation. “Our savings would have been 0.1 percent per month,” they added. “No way on God’s name was I going to spend $20,000 to save $80 per month.”

Another Freeport contact, also speaking on condition of anonymity, said they also turned down such a device. “I didn’t want to touch it,” they said. “It didn’t make sense to me. A kilowatt is a kilowatt. I’m sitting her smiling, not having to look over my shoulder at GB Power.”

Tribune Business reported yesterday that purported “devices” at the heart of the GB Power and GBPA probes have been installed widely throughout Grand Bahama and Nassau, as well as some Family Islands, in a desperate bid by some companies and homeowners to reduce energy costs.

While they had been promoted as helping to produce a significant reduction in electricity bills, this is not what even genuine capacitor banks are designed to produce. These are intended to enable motors and electrical equipment to run more smoothly and efficiently, but do not cut the amount of energy consumed.

Tribune Business sources suggested that, in order to produce the promised savings, some installers had wired the devices such that they bypassed a “leg” of the electricity meter box. This, they explained, meant that not all energy consumption by a home or business was recorded by the utility - resulting in underbillings and losses to it.

GB Power yesterday confirmed this newspaper’s analysis, revealing: “These businesses are a victim of fraud, and were in fact either connected directly to GB Power’s power system via a meter bypass, or the meters were tampered with to under-read actual usage.

“To date, at every location inspected by GB Power and the [police] in the presence of the owners, it has been shown that all ‘devices’ are simply boxes consisting of bogus wiring with red or green lights, some with small unconnected LCD screens and sand-filled canisters pretending to be ‘capacitors’ in some instances.

“These fake boxes do nothing but act as a smokescreen for the dangerous diversion of GB Power’s electricity supply and bypass of our meter infrastructure. All customers with these fake boxes installed throughout the island have been abstracting GB Power’s electricity supply without paying for the electricity consumed.”

GB Power said “the number of such fake devices and non-compliant installations are unknown to us” presently, but warned that such practices were dangerous for all parties.