By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama Power Company is seeking returns of close to 13 percent in its proposed revision to the island’s electricity tariffs, it can be revealed.

The disclosure was made in financial filings by its 100 percent owner, Canadian utility giant, Emera, which confirmed it expects the Grand Bahama Port Authority (GBPA) will take a decision on whether to approve its application before year-end.

This would enable the changes to take effect in line with GB Power’s January 1, 2021, implementation schedule. Grand Bahama’s electricity monopoly is seeking returns of between 8.5 percent to 9 percent on its base rate tariff, and a 12.84 percent return on equity (ROE), both of which it says are permissible under its supervisory framework with the GBPA, its regulator.

“On September 23, 2021, GB Power filed an application for rate review with the GBPA. The application seeks a revision in base rates, charges and tariff classifications effective January 1, 2022, for a three-year period ending December 31, 2024,” Emera said.

“GB Power’s proposed rates would reinstate the amortisation of regulatory assets, which had been deferred as part of the five-year rate stabilisation plan. Rates were designed based on an 8.5 per cent to 9 per cent allowable regulated return on rate base, and a target regulatory return on equity of 12.84 per cent. A decision is expected from the GBPA by the end of 2021.”

GB Power has already faced a furious backlash from the Government, businesses and civil society groups over its revised tariff proposals, with the Davis administration repeatedly emphasising that it is opposed to increasing electricity rates on Grand Bahama. However, it has no regulatory or legal authority over the matter, and has to rely on pressure and moral suasion.

Meanwhile, Emera’s results for the 2021 third quarter and nine months to end-September 2021 show GB Power’s contribution to its net income has risen significantly year-over-year. This tripled in the third quarter, jumping from $1m to $3m, and quadrupled for the year-to-date - jumping from $2m in 2020 to $8m for the first nine months of 2021.

“Other electric utilities Canadian dollar contribution to consolidated net income in the 2021 third quarter increased $2m to $8m, compared to $6m in the 2020 third quarter, due to higher other income at GB Power,” Emera said. This “other income” was not described further.

Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC), a long-time GB Power opponent, said his organisation was “targeting” December for a demonstration - likely to be held during the month’s first week - and other activities as it had anticipated this was when the GBPA would decide whether to approve the rate application.

Praising the Government for its rapid response, which “has not been the norm in dealing with the Power Company, Pastor Victor said “all options are on the table” in opposing the proposed rate increases and restructuring.

Reiterating that Grand Bahama’s economy “is in very bad shape”, he added that further raising energy prices will worsen the impact on consumers already grappling with higher rising food prices and product shortages - the latter resulting from the global supply chain backlog.

“The money people have, the little people have, it’s a struggle,” Pastor Victor said. “Today, I spoke to a government employee and they have still not gotten their home together from Hurricane Dorian. She is applying for help wherever she can to get assisted. That’s a typical story in Grand Bahama.

“Once you increase your power rates, you’re are not only increasing the amount the consumer has to spend but there will be a domino effect because businesses have to pay the same cost. I have to pay more for electricity at home, I am paying a storm recovery charge I did not have to a year ago, and businesses will have to pass the costs on.

“It trickles right through the economy. If you increase electricity rates, we’re already unattractive to potential investors because of the cost of electricity, so you’re making it worse. I had a conversation with a company representative; they looked at coming to Grand Bahama years ago, but the cost of electricity was too high for them to consider putting a plant here,” he added.

“That’s the dilemma we have. There’s a lot of people still living without electricity. I spoke with a woman this week when I went to the Power Company, as I had to pay my bill. It’s just her and her fiancee living in a home, and she was showing me how expensive the electricity rate was at her home.

“You cannot be paying $700 a month when there are two people in a home with a gas stove and there is one A/C in the house. She was paying more than my wife and I. She was living for several months without electricity until they got money to put on the bill. She was living without electricity for nine months, but there are people living without it for years.”

The GBPA previously said its decision will be communicated to GB Power no later than December 1, 2021, having received the proposal on September 23. GB Power previously said residential customers faced with electricity base rate increases would only see a modest rise in their monthly bills.

Asserting that 42 percent of residential customers will see either a decrease or no change in their base rates, GB Power said the other 58 percent faced with an increase will see their monthly bills rise by an average of between $7 and $20 depending on consumption.

“As noted in today’s release, 42 percent of residential customers will see a decrease or no increase in their bills,” the utility reiterated. “Customers who consume 600 kWh (kilowatt hours) per month can expect an increase of about $7 per month under the proposed rate structure.

“Those who consume 800 kWh on average will see an increase of about $12 per month. Those who consume 1000 kWh on average will see an increase of about $20 per month.”