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Environment Minister unveils energy sector reform

The Minister of the Environment and Housing Kenred Dorsett outlined a comprehensive plan aimed at reforming the energy sector during a Bahamas Chamber of Commerce and Employers Confederation luncheon yesterday. 

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TheBahamasInvestor.com
Thursday, September 12, 2013
Thursday, September 12, 2013

Minister Dorsett

Minister of the Environment and Housing Kenred Dorsett addresses the topic: “Energy Sector Reform in The Bahamas” during the BCCEC luncheon September 11, 2013, at the British Colonial Hilton. (BIS Photo/Raymond Bethel)

The Minister of the Environment and Housing Kenred Dorsett outlined a comprehensive plan aimed at reforming the energy sector and delivering more affordable electricity to consumers.

He was addressing the topic: “Energy Sector Reform in The Bahamas” during a Bahamas Chamber of Commerce and Employers Confederation (BCCEC) luncheon September 11, 2013, at the British Colonial Hilton.

Minister Dorsett outlined plans, policies and new legislation aimed at revamping the country’s energy sector, particularly as it relates to the Bahamas Electricity Corp (BEC) the operational costs for investors and commercial entities and the heavy economic impact on Bahamian families.


“The cost of electricity in The Bahamas has become a problem that we cannot allow to continue to increase while expecting growth within the economy of this country. The two can no longer co-exist,” he said.

The government has sought to reduce operational costs at BEC by improving on operational efficiencies and reducing waste wherever possible, he said.

An Energy Task Force was established and charged with advising the government on solutions to reducing the high cost of electricity.

“We eliminated the excise tax on fuel used by BEC in the 2013-2014 Budget, which was forecasted to reduce energy cost by six per cent. We also eliminated tariffs on inverters for solar panels and LED appliances to ensure that more of our citizens would be able to afford these energy saving devices,” he said.

Another savings measure is to create two new BEC entities into which the relevant assets, liabilities and operations of the corporation will be transferred, the Minister added.

The first, a new Transmission and Distribution Co (NewCo), which will be wholly owned by BEC. This company will be responsible for the operation, maintenance, repair and expansion of NewCo’s electricity transmission and distribution systems and for billing, collection, customer services and other relevant services across The Bahamas.

The second company will be a new generation service company, which will be responsible for the operation, maintenance, repair, financing of BEC’s current electricity generation facilities and certain other assets located across The Bahamas, as well as the development of new power generation plant. It will enter into a Power Purchase Agreement with NewCo.

“We are seeking a partner to manage the operations of NewCo, bringing state of the art business practices, processes and technology to the transmission distribution systems,” Dorsett said.

The government expects to have a clear cost reduction targets and incentives, as well as performance benchmarks embedded into the contract.

The performance benchmarks will address issues such as network reliability, average outage periods, frequency of outages, system losses, speed of restoration of power, speed of connections, billing punctuality and a number of other issues.

“These initiatives will be underpinned not only by robust contracts with the preferred bidder or bidders, but also by a new regulatory regime, which, amongst other benefits, will bring direct and independent oversight of the cost of electricity,” the Minister said.

The framework of this new regime is being developed and the government is expected to pass relevant legislation in early 2014.

Chamber of Commerce Bahamas

Members of the Bahamas Chamber of Commerce listen to the address by the Environment Minister at the British Colonial Hilton. (BIS Photo/Kris Ingraham)

The Grand Bahama Port Authority Ltd (GBPA) and Port Group Ltd (PGL) have announced the resignation of Ian Fair as chairman and director of both companies effective today.

Ultrapetrol Bahamas Ltd (NASDAQ:ULTR) was upgraded by research analysts at TheStreet from a “sell” rating to a “hold” rating in a report released on Wednesday. Pictured: Jim Cramer; Mad Money, TheStreet.com.

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