October 4, 2022

PRESS STATEMENT ON FUEL CHARGE AMENDMENTS

FOR IMMEDIATE RELEASE

The Bahamas Power and Light Company (BPL) takes this opportunity to advise its consumers that due to the rising costs of fuel needed for the generation of electricity at its plants throughout the country, the circumstances are such that the Company must move to adjust the monthly Fuel Charge to ensure the sustainability of its operations and its ability to fulfill its mandate.  In this regard, the Company will incrementally increase the fuel charge on customers’ bills in a gradual schedule designed to soften any adverse economic, business, and/or lifestyles changes that may be necessary as a result of the said increases, which are outlined below:

Phases	<800 kWh (increases of 2 cents increments per quarter)	>800 kWh (increases of 4.3 cents increments per quarter)
October 1 to November 30, 2022	12.5 cents	14.8 cents
December 1, 2022 to February 28, 2023	14.5 cents	19.1 cents
March 1 to May 31, 2023	16.5 cents	23.3 cents
June 1 to August 31, 2023	18.5 cents	27.6 cents
September 1 to November 30, 2023	18.5 cents	25 cents
December 1, 2023 to February 28, 2024	17 cents	18 cents

 During each phase of the implementation, customers can expect an increase of 2 cents per kWh up to 800kWh and 4.3 cents for all units over 800kWh.  It is noted that an important consideration of the graduated schedule was the desire to secure affordable rates for those vulnerable consumers in the 0-400kWh essential services consumption range, while also incentivizing the transition to a more responsible consumption strategy for the remainder of our customer base.  In this aspect, the fuel charge structure affords all customers using up to 800 kWh to benefit from a lesser increase rate of 2 cents per quarter as opposed to a 4.3 cent increase for that same period; therefore, the opportunity exists for all consumers to benefit from energy conservation and efficiency improvements initiatives. 

Additionally, as we adjust to the post-pandemic and Dorian effects on the local economy, BPL is aware and is sensitive to the fact that there are customers who may have difficulty making payments on their accounts. Customers that are unable to address their outstanding balances in a timely manner are encouraged to contact BPL’s nearest Business Office asap to make appropriate arrangements to accommodate the same.  BPL remains committed to working with its customers as we all “Build for Better.”.

 

Rising Cost of Fuel
As you are probably aware, within the last twelve months fuel prices have increased globally at a rate that has made it imperative for the company to move in this direction. In fact, the fuel used to generate electricity now costs about 100% more than it did a year ago. Notwithstanding the global trends, BPL has been able to maintain the Fuel Charge at 10.5 cents per kWh since the implementation of its fuel hedging program in 2020. However, as the hedged volumes are declining under the current hedging strategy and there is no sign of immediate relief in the market, BPL must now move to align its Fuel Charge with the current market demands.  

For comparative purposes, provided below are the listed current Fuel Charges from our counterpart utilities throughout the region:

 

Regional Market Prices
Jamaica – Cost for fuel per kWh – $0.22

Barbados – Cost for fuel per kWh – $0.22

Cayman Islands – Cost for fuel per kWh – $0.29

Turks and Caicos (Billed by territory)

Grand Turk – Cost for fuel per kWh – $0.2053

Providenciales – Cost for fuel per kWh – $0.2405

South Caicos – Cost for fuel per kWh – $0.2816

 

Mitigative Measures
While BPL encourages its consumers and prosumers to participate in the push to reduce our energy dependence on the use of fossil fuels, we at BPL are also actively pursuing short- and long-term solutions that will minimize our fossil fuel usage and consequently alleviate the burden of the cost of electricity to our customers.

Our short-term solutions include, inter alia, the active monitoring of our dispatch to prioritize least cost generation, fuel hedging, fuel diversification, and the implementation of an innovative fuel consumption reduction initiative in the Battery Energy Storage System (BESS) to be commissioned on the New Providence grid within the next twelve months.  The BESS will provide a spinning reserve and assist with eliminating grid stability concerns associated with the integration of Renewable Energy systems, thereby, positively moving the needle towards a smarter, more resilient, and greener network. In addition to the aforementioned production initiatives, BPL is in the advanced stages of preparations to replace 30,000 streetlights in New Providence with more efficient LED fixtures.  It has been determined that the streetlight replacement project will reduce the consumption for this service by approximately 50%, which will translate to direct savings in the Fuel Charge. 

There are also several long-term initiatives that BPL and other Government agencies are working on to reduce the country’s dependence on fossil fuels.  

In this regard, we are pleased to advise that BPL is working on utility scale projects of its own on several Family Islands. These projects will enlarge the diversification of energy sources within BPL’s generation fleet. We recently commissioned our first solar micro-grid system in Ragged Island, which powers 90% of the island’s generation needs. This award-winning solar and battery storage solution implemented by BPL and is paving the way for the Company in the renewables arena. 

Concurrently, the Government along with its partners are outfitting government buildings with rooftop solar and constructing microgrids around essential service facilities in the Family Islands.

The Government’s Project Execution Unit with the assistance of grants from the IDB and EU Bank is pursuing hybrid power solutions to ensure uninterrupted electricity for essential services on several family islands including Abaco and Eleuthera. These projects are expected to be completed by the end of 2023.