By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamas Power & Light (BPL) has delayed $15m in maintenance overhauls beyond summer 2022 “to manage cash”, a Cabinet minister revealed yesterday, while conceding that such practices have undermined generation “reliability”.

Alfred Sears, minister of works and public utilities, made the revelation as he warned that a blackout-free summer for New Providence cannot be guaranteed despite multiple preventative measures.

Speaking during his Budget debate contribution in the House of Assembly, he explained that BPL’s own generation capacity of 241.1 Mega Watts (MW) cannot cover the island’s projected peak summer demand of 260 MW.

Thus faced with a near-19 MW, or 7.3 percent, generation shortfall and the total absence of any spare capacity, he revealed that BPL had no choice but to contract with Aggreko and Sun Utilities, the latter a subsidiary of BISX-listed FOCOL Holdings, for the provision of a combined 83 MW in rental generation to minimise summer load shedding and outages.

Breaking down the deferred maintenance, Mr Sears revealed that at Clifton Pier power station’s Station A, the overhauls are projected to cost some $2.336m. Two further units, known as GT 8 and GT 9, need “major inspections” due to the amount of hours they have been run and started - an exercise that is forecast to cost $8m.

Finally, the DA9, DA10, DA12 DA13 generation units were all overhauled this year but require maintenance on an annual basis, something that will cost an additional $5m. BPL’s financial woes have resulted in it deferring critical maintenance for years, resulting in reliability problems on the power production side, but it is unclear why the state-owned energy monopoly again has insufficient capacity to meet demand.

BPL’s $95m acquisition of 140 MW in new generation capacity from Wartsila in 2019 was billed as the solution to its New Providence generation challenges, which that summer resulted in daily outages and rolling load shedding that plagued the entire island.

Mr Sears’ House of Assembly presentation, meanwhile, was almost entirely focused on the short-term and getting through summer 2022. No mention was made of other pressing BPL issues, particularly whether its present fuel hedging strategy will be continued past end-June 2022 when the present structure expires.

With crude oil prices now over $120 per barrel on both the West Texas Intermediate and Brent Crude indexes, standing between $122.5 and $124.1, even if BPL renews the fuel hedge with a new structure, the surge in global costs means that it - and, by extension, its customers - will still face a higher expense than the present fuel charge of just over 10 cents per kilowatt hour (KwH) on their electricity bills.

Summer, and peak demand, could thus coincide with higher fuel charges and send electricity bills soaring come August and September - the period when they traditionally peak. In addition, Mr Sears gave no indication of how the Government plans to solve BPL’s financial woes with the $535m Rate Reduction Bond (RRB) left behind by the Minnis administration having been shelved for fear of the cost it will impose on Bahamian businesses and households.

There was also no discussion surrounding the fate of the proposed Shell North America liquefied natural gas (LNG) terminal and power plant at Clifton Pier - a project that was supposed to enable BPL to exit power generation and become solely a customer-focused, transmission and distribution business.

Prime Minister Philip Davis QC has previously referred to a Cabinet energy sub-committee that is studying the LNG possibilities, and renewables, but Mr Sears made no reference to these deliberations or the possibilities yesterday.

The minister, acknowledging that the rental generation deals and other measures may still not be enough to prevent electricity supply challenges over the coming months, nevertheless yesterday said the arrangements with Aggreko and Sun Oil should give BPL sufficient build-in redundancy to enable it to cope if any of its engines shut down.

Aggreko is providing 40 MW, and Sun Oil the remaining 43 MW, in rental generation. Without this, Bahamian households and businesses could again be facing a hot, dark summer through load shedding and rolling outages if the gap between BPL’s own generation capacity and peak demand was not plugged. Load shedding has occurred in multiple areas recently.

Mr Sears, though, warned that even with these arrangements an outage-free summer cannot be guaranteed. “Due to BPL units having to forego maintenance in the previous years, this has reduced the reliability of the BPL-owned units,” the minister said.

“This, coupled with aging portions of the transmission and distribution system, can combine to still contribute to supply interruptions on the grid. These types of interruptions on the grid can typically be quickly restored unless the interruption is as a result of catastrophic failure of a large or critical item of the plant on the grid system.

“Here we are really talking about contingencies. This is what we call contingency planning but, in a very frank manner, we are reporting to our owners - the Bahamian public and Parliament - what the possible complications can be, but even with respect to this we see provisions and redundancy being put in place to minimise system-wide interruptions.”

Mr Sears also unveiled strategies to minimise power outages caused by transmission and distribution woes. These include “infrared inspection and correction of the major 132 KV transmission circuits, utilised to detect weak electrical connections”.

There will also be “a load balancing exercise to continuously identify and correct electrical circuit loading, which reduces the risk of failure due to overloading and also optimises load-carrying capacity, and a “new vegetation management plan to identify and target high-value and high-risk lines, and clear them of trees to reduce the impact on these overhead lines during extreme weather events”.

Mr Sears said maintenance will occur at “all the primary substations around the islands so that the critical facilities can have a high availability throughout the period”, while there will be “a protection system at all primary transmission substations to ensure these systems operate as they should, protect equipment and isolate faults”.