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BPL Chief Explains 26 Percent Fuel Surcharge Hike

Residents and businesses across Abaco and The Bahamas were faced with “ridiculously high” electricity bills as Bahamas Power and Light (BPL) compensates for mechanical losses at New Providence’s generation plant.

Bahamians are paying the price of “a double whammy” caused by the recent fires at Bahamas Power & Light’s (BPL) Clifton Pier plant, according to Whitney Heastie, the state-owned utility’s chief executive.

The two engines affected, which typically generate 25 percent of New Providence’s energy supply, not only use lower-cost heavy fuel oil (HFO) but also generate more energy per oil barrel than any others in BPL’s fleet.

As BPL has to rely more on its Blue Hills plant, and more expensive fuel, to meet the capital’s electricity needs, Mr. Heastie added that the fires along with the spike in global oil prices are being passed on to BPL customers through its fuel charge.

He said that “When we are not running those two units then we have to rely on that capacity coming from the diesel-burning assets at Blue Hills. When you look at the total load for New Providence, which averages about 200 MW, that there alone is 25 percent of the total load.

“The double whammy is they are not only a lower fuel cost, but more efficient machines. We get more power out of those machines per barrel than we get at Blue Hills, so the efficiency of the assets at Clifton Pier is higher. They’re burning a higher value fuel in as much as we can get more power out of a barrel of HFO than we can get out of a barrel of diesel.”

Mr. Heastie noted that the per barrel price of Clifton Pier’s heavy fuel oil was currently around $69-$70, whereas that for the diesel fuel employed at Blue Hills – and which BPL is currently having to rely on much more – is around $90 per barrel.

That represents a $20 difference, and BPL’s chief executive conceded that this is what makes “a significant impact in terms of what the customer pays”.

He added: “It’s also worthy to note, because we do have some customers who feel the fuel charge is something that the power company should absorb, that this is a direct pass through.

“Whatever we use in barrels and price we divvy it up and pass it on to the customer. If we don’t do that, the power company will be out of business. It’s important to understand we don’t make a cent off of fuel; we make nothing off of fuel.”

The Central Bank of The Bahamas, in its monthly report for August, found that BPL’s surcharge had increased by 26.7 percent year-over-year, hitting 17.47 per kilowatt hour that month – a rise of 0.5 percent compared to July.

Global oil prices continued to inch up yesterday, with the Brent Crude and West Texas Intermediate indices, the two most commonly used, hitting $85.04 and $74.85 per barrel respectively. These continued increases, combined with the Clifton Pier fires, highlight The Bahamas’ ongoing vulnerability as a result of its near-100 percent reliance on fossil fuels and the shaky nature of BPL’s generation and distribution infrastructure.

“We are working to complete overhaul and return to service one of the more efficient units at Clifton Pier by end of this month. As we move toward the cooler months, we will see a drop in demand and only the more efficient units will be used, resulting in a decrease in the fuel charge to customers,” BPL said yesterday.

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