By YOURI KEMP
Tribune Business Reporter
The deputy prime minister yesterday described Grand Bahama Power Company’s (GBPC) new Dorian recovery levy as “unavoidable” if electricity supply is to be restored to the entire island.
Arguing that this “comes at a cost”, K Peter Turnquest, said: “Obviously any increase in any utility cost or tax is a concern to us as representatives as well as to the government. This, unfortunately, is one of those costs that I think is unavoidable.
“The fact of the matter is we need to restore services to the entire island and that comes at a cost. We have had conversations with the power company since the storm as to how we facilitate this restoration and, unfortunately, this seems to be the only option that is available to us to ensure an efficient restoration of power.
“It is important that we extend those power lines out to the east, because there are projects that are waiting right now to get started and to begin reconstructing and expanding in some instances. Again, while it is certainly regrettable, unfortunately it is necessary.”
Mr Turnquest spoke out after GB Power unveiled the Storm Recovery and Stabilisation Charge that will be added to all customer bills with effect from April 1, 2020, as it seeks to recover the $15.6m cost associated with restoration of its uninsured transmission and distribution (T&D) infrastructure.
Dave McGregor, the utility’s chief executive, argued that the additional levy on consumers was the most transparent and “fairest way” to achieve its objectives since it will act as a ‘pass through’, much like the fuel charge, from which GB Power will not earn a single cent in profits.
“We don’t profit from this,” Mr McGregor told Tribune Business of the new charge. “This will be a direct pass through like the fuel charge is. The only alternative is to build this into the rates, but when there is no hurricane we end up making money.
“We feel this is by far the fairest way for customers to pay for the hurricane. The hurricane needs to be paid for, and the best way is to pay through the customer. It will be a separate line on the bill, a separate charge.” It will pay off Dorian’s $15.6m, and this will be paid off in five years assuming the load comes back the way we hope.
“After that, subject to the approval of the Port Authority, we will continue with the charge at a slightly lesser rate so that we save for future storms. That’s the philosophy. It’s not an easy sell. It’s tough times for all of us. But we spent the money and need to get it back.”
The charge for GB Power’s three customer categories will be:
• Residential - $0.013 cents per kilowatt hour (kWh) or 1.3 cents
• Commercial - $0.008 per kWh or 0.8 cents
• GSL (industrials) - $0.010 per kWh or one cent
It will represent an increase of less than $7 per month for the “average” residential customer, and $24 for the “average” business customer, in a bid to soften the upcoming blow and any consumer push back/fall-out.
Mr Turnquest, meanwhile, said the Government and private sector needed to examine “risk mitigation strategies” and “ensure that we spread this risk over a period ,and not just after an event.”
He added: “That we build more resilient so that we can deal with these storms that are predicted to be ever-increasing and frequent and, again, spread the risk a little bit more so it doesn’t become such a burden after an event, particularly when people are suffering as we know.”
When asked how GB Power’s extra charge will be monitored, Mr Turnquest said: “The Power Company in its statement has said that this is specifically for hurricane recovery costs, so we certainly will expect and hold them accountable to that statement. This is not a profit-making fee; this is to recover the cost of reconstruction. So we will hold them to that as we go forward.
“I fully anticipate that once they have gotten the recovery estimate that they said was about $15m or so, once they have accounted for that they will in fact roll back that fee. That $15m is not only covering the cost of the extension or reconstruction of power lines to the east, but also the restoration that had to happen within the city of Freeport, which was also significantly damaged.”