By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition yesterday demanded that energy regulators ensure Bahamas Power & Light (BPL) is not covering operating costs from a fuel charge now set to be subsidised by Bahamian taxpayers.

Michael Pintard, the Free National Movement (FNM) leader, in a letter to the Utilities Regulation and Competition Authority (URCA) seen by Tribune Business, called on the regulator to probe whether BPL's fuel charge - which is meant to be 100 percent passed through to, and recovered from, consumers - is being used "illegally" to pay its operational expenses.

His letter emerged after BPL, in a statement issued yesterday, confirmed that Bahamian taxpayers, via the Government, will be funding and underwriting the suddenly-announced Summer Rebate initiative that is designed to provide BPL's residential or household customers with modest relief from soaring energy costs.

The state-owned utility confirmed that it will be "the Government subsidising the difference to ease the burden on consumers" via an initiative designed to provide BPL's residential consumers with a 5-6 percent discount on the state-owned electricity provider's July fuel charges. These fuel charges typically account for around 50-60 percent of the total bill.

As a result, several observers suggested that the Summer Rebate is an initiative where - what the Government is giving to BPL customers on one hand - it is taking away in the other in their capacity as the taxpayers underwriting the proposed relief.

BPL's statement, which added little to the original release by the Prime Minister's Office, said its fuel costs had risen from around 16 cents and 20 cents per kilowatt hour (KWh), for the portions of customer bills below and above 800 KWh respectively, to 18.996 cents and 22.196 cents in June.

No explanation was provided for the more than two cents per KWh increases other than BPL affirming it is having to rely on automotive diesel oil (ADO) - the most expensive of its fuel sources. Mr Pintard, in his letter to URCA, challenged why BPL's increasing fuel charges appear to be moving in the opposite direction to relatively stable global oil prices notwithstanding the recent conflict between Iran and Israel.

Research by Tribune Business revealed that global oil prices, as measured by the Brent crude index, have declined by 20.52 percent year-to-date to stand at $67.678 per barrel as Tribune Business went to press last night.

"We note a further concern, reported to us by several BPL customers, that fuel charge increases for the year seem to exceed the increases in global price in fuel," Mr Pintard said. "As such, we request that URCA reviews the rate of charge increases to ensure that BPL is not in any way using it two-tier surcharge approach to subsidise the operations of the company.

"It is our understanding that any such cross-subsidisation would be illegal." The Opposition also called on URCA to give an update on the progress of its investigation into whether BPL's 2022-2023 fuel charge hikes, which soared by 163 percent in just eight months, were legal.

Referring to what BPL described as its 'glide path' strategy to recoup some $90m-$100m in under-recovered fuel costs from its customers, Mr Pintard said he and his party "maintain" that the use of the proceeds generated was "inconsistent with the published fuel recovery plan that URCA had specifically mandated".

He added: "It was, and is our contention that BPL did not use those receipts to pay off its debt obligations to the Government that were advanced to cover BPL's fuel arrears, notwithstanding the fact that URCA approved the additional charge with the express requirement that BPL use the proceeds for that purpose."

However, URCA subsequently revealed that its probe into whether BPL's 'glide path' complies with the law and accompanying regulations had been delayed as a result of having to “re-bid” the contract for a third-party consultancy to carry out this probe because the costs involved exceeded the budget it had allocated.

With no further public disclosures, Mr Pintard told URCA yesterday: "Given the gravity of this matter, we trust that the consultancy has now been engaged and the resulting review has been advanced, if not completed. When can the public expect URCA to publish the results?"

Suggesting that there are similarities between BPL's former 'glide path' and the Summer rebate, the Opposition leader added in a statement: "We appreciate the fact that BPL brought some clarity to this so-called 'rebate' with their statement today that stressed that the Bahamian taxpayers will be the ones still footing the bill for this rebate via a subsidy to BPL.....

"Now, fast forward, we have the same Davis administration again creating an unfunded liability at BPL that all Bahamians will have to cover, including those taxpayers on the islands not served by BPL." Mr Pintard challenged why "the Government [is] pretending that Bahamians are saving money when the funds to cover the rebate are still coming from Bahamian taxpayers via the Treasury?"

He also questioned where the Summer Rebate will be charged within the Government's Budget, as there was no allocation provided for the upcoming 205-2026 fiscal year for this purpose, and asked how much it will cost Bahamian taxpayers.

"Given that this rebate is being funded by all Bahamian taxpayers, will the Government confirm that the customers of Grand Bahama Power and other private utilities in the Family Islands will also get the same rebate that is being offered to BPL customers?" the Opposition leader asked.

The Summer Energy Rebate will lower BPL's fuel charge by 1.1 cents per kilowatt hour (KWh) for both portions of the bill - under and over 800 KWh. The fuel charge below 800 KWh will be lowered from the 18.5 cents that appeared in Bahamians' July bills to 17.4 cents, representing a 6 percent discount, while for over 800 KWh it is being lowered from 22.5 cents to 21.4 cents.

The move came after social media lit up in outrage as consumers received their bills due for payment in July. Almost all questioned the sharp month-over-month increases, with posts seen by Tribune Business showing all-in cost increases ranging from 38.6 percent to almost tripling via a 199 percent jump.

Tribune Business, which has also seen its own bill double, calculated that the 1.1 cent per KWh reduction on the portion of its fuel charge above 800 KWh would have saved around $36.70 on its July bill, while the savings on the portion below 800 kilowatts would have been $8.70. This translates into just a $45.40 collective saving.

The Government's latest quarterly debt report, covering the three months to end-March 2025, shows it has yet to repay much of the loan it received from the Government - thought to be around $110m - to help cover the arrears owed to Shell under the former 'glide path' initiative. Some $170.3m was shown to be owing as at end-March 2025.