By NEIL HARTNELL 

Tribune Business Editor 

nhartnell@tribunemedia.net

GRAND Bahama Power Company’s proposed 6.3 percent base rate increase was yesterday branded as “absurd” and “wholly ill-conceived” given the potential impact on residents and businesses.

The island’s electricity supplier managed to unite politicians of both parties in opposition to its application for approval by the Grand Bahama Port Authority (GBPA), its regulator, despite asserting that light bills for 75 percent of its customers will either remain unchanged or enjoy a slight decrease due to the base rate hike being offset by reductions in the fuel charge.

“It is absurd to even consider another rate increase at this time,” blasted Kwasi Thompson, the Opposition’s finance spokesman, to Tribune Business. “Let’s put it this way: The Port Authority and the Government should categorically reject it and deny it.

“It is absurd for the Power Company to make the application, and most certainly it should be denied by the Port Authority and categorically denied by the Government. Pointing out that Grand Bahama’s economy continues to struggle, with its economic output hitting a nine-year low of $1.53bn in 2022 before recovering slightly to $1.546bn in 2023, the east Grand Bahama MP said the move was especially ill-timed.

“All the people of Grand Bahama have experienced is inflation, the high cost of living, rising boat fees, increased VAT on bread basket items and rising aviation fees,” he added. “It has been additional fee after additional fee. The application should be outright denied. It is absurd to even consider it.”

Mr Thompson’s stance was echoed by Ginger Moxey, minister for Grand Bahama, who argued that GB Power should review its application based on “the hardship faced by Grand Bahamians and the unreliable performance of GB Power since the last increase.

“Whilst this decision claims to be ‘in alignment with its ‘Operating Protocol and Regulatory Framework’, it is wholly ill-conceived, badly-timed and appears to prioritise profit over the well-being of the community,” Mrs Moxey argued in a statement.

“We empathise with Grand Bahama residents and businesses, and are concerned about the additional strain this proposed increase will present. In 2020, GB Power implemented a 1 percent increase as a ‘Storm Recovery and Stabilisation Charge’ (SRS),and, in early 2022, they were granted approval by the Grand Bahama Port Authority (GBPA) for a 3.4 percent increase to the base rate, which was implemented in April 2022.

“Now, in 2024, amidst numerous power outages, GB Power seeks to impose a further 6.3 percent increase to the base [rate]. This is not acceptable. Further, we call on GB Power to enhance its process and functions of investigating and assessing claims of damage to household appliances and equipment resulting from frequent outages.”

GB Power’s new rate application, which covers the three-year period between 2025-2027, was said to be merely “part of the process” that it committed to as part of the Operating Protocol and Regulatory Framework agreed with the GBPA for electrical utility regulation in Freeport. This mandated that it provide a rate application for the GBPA’s review, and rejection/approval, by August 1 as the three-year cycle came around again in 2024.

GB Power, in a statement, said this year’s submission is broken into two components. Besides the 6.3 percent base rate increase “to maintain investment and operations going forward”, it also features a “system resource plan” designed to align the utility with the Government’s National Energy Policy goal of generating 30 percent of The Bahamas’ energy needs from renewable sources by 2030.

Seeking to both justify, and defend, its 6.3 percent base rate increase bid, GB Power said the extent of the hike sought is lower than The Bahamas’ inflation rate over the past three years. And, with a fuel hedging strategy already in place to cover 2025-2027, it pledged that its proposal will “result in a small all-in decrease for the majority of electricity customers” due to the base rate hike being more than offset by lower fuel costs.

Nikita Mullings, GB Power’s chief operating officer, said in a statement that only commercial customers may see a slight increase in their light bills if the GBPA approves the base rate increase as proposed.

“With the impact of our fuel hedging programme, residential, general large service and large industrial customers are forecasted to receive a small reduction on an all-in basis while commercial customers would see a small, estimated increase of less than 2 percent,” she said.

“Since our last rate adjustment in April 2022, we have seen reduced sales from our general large service customer classes due to lower energy consumption, the loss of our largest customer and significant inflationary pressures.

“We know there is no good time to propose a rate increase, but the requested adjustment is essential to maintain and improve the efficiency and reliability of services, and to allow us to invest in critical infrastructure maintenance as outlined in our system resource plan to enable the integration of renewable energy sources in keeping with the Government’s targets.”