As part of its Regulatory Framework Agreement, the Grand Bahama Power Company (GBPC) filed its first-rate adjustment application since 2015 with the Grand Bahama Port Authority (GBPA). The filing addresses two main topics: the requirement for an increase in base rates to maintain its operations going forward, and a generation plan that would see 15% of the Island’s electricity needs fuelled by renewable energy by 2026, bringing greater energy diversification and independence.
“GBPC has faced significant challenges since our last application in 2015 with impacts from two major unprecedented hurricane events, Matthew and Dorian, and in each case, has responded with quick action to safely restore the Island’s electricity in record time,” said Dave McGregor, GBPC’s President and Chief Operating Officer of Emera Caribbean. “Despite the challenges, we’ve continued to manage the operations and capital investments to stabilize rates for customers. We know no one wants to see rates increase, but the reality is that we need to continue to invest in our operations to maintain safe, reliable and increasingly renewable electricity service for customers for years to come.”
Overall, the average increase to the all-in rate for all customers is projected to be 4%, as compared to inflation rates in The Bahamas of 8.4% over the past several years. Not all customers will see a rate increase and, in fact, a decrease in base rates is proposed for a segment of residential customers.
“The application proposes a 3.2% rate reduction for residential customers who consume up to 200 kilowatt hours per month, representing about 18% of customers,” explained Mrs. Nikita Mullings GBPC’s Chief Operating Officer. “In addition, there is no change in base rates proposed for residential customers consuming between 201 to 350 kilowatt hours per month, representing 24% of customers. Together, this pricing structure will result in 42% of residential customers having a decrease or no change to the base tariff.”
GBPC advises that, for those residential customers who would experience a rate increase under the filing, proposed increases will vary depending on usage. For those consuming 351 to 800 kilowatt hours per month, representing about 32% of customers, they will see a base increase ranging between 0% to 7.5%. Residential customers consuming more than 800 kilowatt hours per month, representing about 26% of its customers, will experience a base increase of 7.5% to 8.9%. Under the filing, General Service Large customers would see an increase of 3.5% to 4%, and Commercial customers would see across-the-board increases of 4.4%. “With regard to fuel cost, we have 80% of our fuel needs hedged for 2022 so we can predict that the fuel charge will remain at 10 cents per kilowatt hour through the next 15 months,” added Mrs. Mullings. “This charge has remained fixed at 10 cents since 2016, resulting in fuel rate stability for customers for 7 years. To help ensure this fuel rate stability beyond 2022, we will continue to secure competitively priced fuel through our hedging program going forward.”
GBPC’s generation plan, also included in its rate filing, looks at the energy demand forecast and compares it against the utility’s current generation availability. “The generation plan shows that, with a notable drop in load over the past five years, there is no need for significant generation investments,” commented Mr. McGregor, “However, this is an opportune time to make investments in small utility-scale solar plants where and when it makes sense for our customers from a cost perspective. That is, where the cost of solar would be less than or equal to the cost of fuel.”
Additionally, the utility has proposed to look for Independent Power Producers to provide the same affordable solar power to GBPC’s grid, opening a new sector for Bahamian investors. “Investments in solar would see about 15% of our generation from renewable sources by 2026,” added Mr. McGregor. “That translates to cost savings for customers and a notable reduction in our carbon footprint.”