By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Many Bahamians “really struggle” to cope with soaring electricity bills simply because they are “living from pay cheque to pay cheque”, Grand Bahama’s Chamber of Commerce chief said yesterday.

Dillon Knowles, speaking after the outcry over Grand Bahama Power Company’s failure to warn consumers of mass disconnections due to outstanding bills, told Tribune Business the financial realities endured by many Bahamians must not be forgotten given that “significant changes” in energy costs frequently “upset the balance of their budget” - especially when they are not expected.

GB Power’s fuel charge for September has reduced by more than three cents per kilowatt hour (KWh), or 13.4 percent compared to the August peak of just over 23 cents per KWh. However, the $0.1992 per KWh charge for this month is still over one cent higher than the $0.1884 cents per KWh for both June and July - August representing a more than four cent, or 22 percent jump on those two months.

Grand Bahama’s energy monopoly has blamed the fuel charge surge, which in August even exceeded Bahamas Power & Light’s (BPL) equivalent for the rest of the country, on having to use more rental generation units with some of its own offline for maintenance. Rental generation typically uses the more expensive diesel fuel as opposed to the heavy fuel oil (HFO) consumed by GB Power’s own units.

Mr Knowles said the peak fuel charge had occurred at “the worst” time in the year - the summer months when energy consumption is at its highest. As a result, GB Power’s business and residential consumers were hit with the proverbial ‘double whammy’ - peak consumption volumes and fuel charge rates, which likely resulted in some being unable to afford to pay the soaring bills.

“Unfortunately, a large percentage of the Bahamian population live from pay cheque to pay cheque, and when they have a significant change in a significant purchase [such as energy] that kind of upsets the balance of their budget in a significant way,” the GB Chamber president told Tribune Business. “I hope we all understand and appreciate that. It’s really a struggle for a lot of people.

“I try to help people in Grand Bahama understand that BPL is just as expensive, if not more expensive than GB Power, but that doesn’t sit well with people as they see it as deflecting from the higher prices as opposed to helping them understand why these things happen.

“That’s why it doesn’t really resonate with anybody when they struggle with making a decision about paying the power bill versus buying groceries. The problem is that I don’t see a short-term solution to this problem.”

Mr Knowles said it was critical, for both GB Power as well as all other Grand Bahama-based businesses, for the island to regain a critical mass of consumers. Until that happened, he explained it did not make sense for GB Power and others to invest capital in improving or expanding their operations, as all need more consumers to spread out and reduce their overhead costs.

“Most businesses don’t get to just spend more capital to become more efficient without having more demand for their goods and services,” the GB Chamber president added. “You get a situation where the Power Company is in the same boat as everyone else.

“We need more customers to spread our overheads over a larger pool of people and bring our unit costs down. Spending capital for the same amount of customers means you just drive the cost up. Every businessman should understand that because every business is impacted from that the same.”

Mr Knowles described as “a faux pas” GB Power’s failure to give customers adequate warning they were in danger of having electricity supply disconnected over outstanding arrears before actually doing so. “I assume most of them came about because of the high bills in the first place,” he added. “I am assuming this is all connected. I guess this is the dominos falling one at a time.”

Asserting that he was “hesitant” to believe many of those disconnected were commercial customers, the GB Chamber president said the fuel charge had increased by about ten cents per KWh from where it had hovered consistently during Spring and early summer.

Mr Knowles, expressing hope that GB Power’s high fuel charge will last “for a relatively short period of time”, added: “As soon as they took the heavy fuel oil (HFO) generators offline and put rental generation on, they [the higher charges] took effect. It happened at the worst period of time in the year, the summer, because everyone’s consumption went up.

“When there’s an increase in your consumption and an increase in the tariff, the price of electricity would impact everybody across the board - not just the residential, but the commercial. Whether they have the wherewithal to withstand this peak for the time that they need to withstand it for, I don’t have the answer for right now. The question is: Can we survive the impact?”