By NEIL HARTNELL 

Tribune Business Editor 

nhartnell@tribunemedia.net

URCA yesterday drew on its newly “strengthened” position to assert it would be illegal for the Grand Bahama Port Authority (GBPA) to approve the 6.3 percent base rate hike sought by GB Power.

The Utilities Regulation and Competition Authority (URCA), setting the stage for a clash between national legislation in the shape of the Electricity Act and the Hawksbill Creek Agreement, Freeport’s founding treaty, argued that the application made by GB Power should have been submitted to itself and not the GBPA.

Juan McCartney, URCA's corporate and consumer relations manager, told Tribune Business that the revised Electricity Act passed recently by Parliament had solidified its claim to be the energy regulator in Freeport by enshrining this in statute law.

“We’ve always maintained that we have the regulatory power in Freeport, and we believe the new Act has strengthened our position and cleaned up any ambiguity anyone may have had,” he said.

“We believe any ambiguity has been cleaned up about URCA’s authority.

“This [GB Power’s rate increase application] is something that has occurred since the new Act became law and we’re responding to that.” URCA issued a formal statement on the matter after being urged by Jobeth Coleby-Davis, minister of transport and energy, to “enforce stringent compliance” with the Electricity Act and “halt” any approvals that may be given by the GBPA.

In a statement, she argued that the review and approval process overseen by the GBPA “breaches our established legal framework” and is in “direct” conflict with the Electricity Act provisions that establish URCA as the sole energy sector regulator throughout the entire Bahamas including Grand Bahama.

However, what neither URCA nor Mrs Coleby-Davis mentioned is the continuing legal challenge being mounted by GB Power to URCA’s regulatory authority in Freeport that still remains before the Supreme Court after some eight years.

GB Power initially sought an injunction to prevent URCA “from regulating, or seeking to exercise licensing and regulatory authority” over it. GB Power’s action is founded on the basis that, as a GBPA licensee, it is licensed and regulated by the latter via the Hawksbill Creek Agreement - and not by URCA and the Electricity Act 2015.

It is arguing that the previous Electricity Act’s sections 44-46, which gave URCA the legal right to licence and oversee energy providers, “are inconsistent, and conflict with, the rights and privileges vested in [GB Power] and the Port Authority” by the Hawksbill Creek Agreement.

GB Power’s statement of claim argues that itself and the GBPA “have been vested with the sole authority to operate utilities”, including electricity generation and transmission and distribution, within the Port area until the Hawksbill Creek’s expiration in 2054. Cable Bahamas, too, also has a separate legal action contesting URCA’s jurisdiction and authority to regulate its Freeport subsidiary.

However, the new Electricity Act 2024, which treats Grand Bahama as a Family Island, makes the Grand Bahama Power Company the “approving authority” for anyone submitting a proposal to supply electricity to the public on the island.

The Act states that any approvals by such an “authority” must also be given the go-ahead by URCA, and this has been interpreted as a neat way of circumventing the GBPA’s utilities regulatory authority in Freeport and transferring it to URCA via GB Power Company. Thus the stage for a major regulatory and legal clash has been set.

And the nature of Mrs Coleby-Davis’ statement yesterday could also be interpreted as undermining URCA’s status as an independent utilities regulator free from government influence and control as it gives the impression of instructing it on what to do.

“The Ministry of Energy and Transport has written to the Utilities Regulation and Competition Authority (URCA) expressing its unequivocal objection to the recent action taken by the Grand Bahama Port Authority (GBPA), which claimed sole regulatory authority over electricity tariffs....,” Mrs Coleby-Davis said in a statement.

“The letter, issued by JoBeth Coleby-Davis, minister of energy and transport, to Randol Dorsette, URCA chairman, and Carlton Smith, chief executive, details the significant regulatory irregularity the GBPA’s actions have introduced.”

The release continued: “The GBPA’s stance is in direct contravention of the Electricity Acts of 2015 and 2024, which clearly designate URCA as the regulatory body responsible for overseeing the energy sector throughout The Bahamas.

“This unilateral decision by the GBPA to approve a rate increase application from GB Power, without the oversight or consent of URCA, is particularly troubling. It not only breaches our established legal frame- work, but also threatens the Government’s ongoing efforts to reduce energy costs for all Bahamians.

“The ministry has called on URCA to enforce stringent compliance with the Electricity Act and to halt any rate increases that have not undergone proper regulatory review.” In fact, the GBPA has yet to approve GB Power’s application for a 6.3 percent base rate increase.

However, Mrs Coleby- Davis, asserting that GB Power’s application potentially undermines the Government’s drive to lower energy costs, added: “We trust that URCA will take swift and decisive action to address this issue and uphold the rule of law within our energy sector.”

Seemingly taking its cue, URCA said the Electricity Act’s section 4 (3) makes it clear that the new law applies to electricity suppliers such as GB Power whether they are based in Freeport or elsewhere. It added that there was no exception to its oversight and, as such, suggested any approval by the GBPA would contravene the Act and be illegal.

“The Electricity Act 2024 also gives URCA sole regulatory oversight for rates and scales of charges for electricity,” URCA added. “Section 38 of the Electricity Act states that any public electricity supplier or authorised public electricity supplier wishing to adjust their rates between now and June 1, 2027, must apply to URCA setting out the reasons for the proposed rate change.

“Before any licensee can impose a change, URCA must approve the change. GB Power has yet to submit the requisite tariff rate application to URCA for its consideration pursuant to the Electricity Act 2024. URCA does not recognise the authority of any other entity to regulate electricity anywhere in The Bahamas, and has not delegated any such authority to any other entity.

“URCA will not hesitate to use its powers established under the law to ensure that anyone aiding in the contravention of the law is subject to appropriate action.” The escalating electricity regulation dispute comes at an especially sensitive time in Nassau-Freeport relations.

Both the GBPA and the Government are moving through the process towards eventual arbitration proceedings over the latter’s assertion that it is owed $357m for the provision of public/government services over and above tax revenues generated by the city between 2018 and 2022.

By seemingly digging in its heels over the utilities regulation issue, the GBPA is likely at best irritate the Davis administration - not least because the latter’s recent Electricity Act reforms sought to circumvent the ability of Freeport’s quasi-governmental authority to regulate the energy sector.