#Freeport, Bahamas – February 25, 2020 — The Grand Bahama Port Authority, Limited (GBPA) announces that the Grand Bahama Power Company Limited (GBPC) has been approved to implement its Storm Recovery and Stabilization Charge.
In 2013, when the new regulatory framework was executed, it included a mechanism for GBPC to recoup costs associated with natural disasters. The mechanism was originally scheduled to be in place in 2016 as a Self-Insurance fund. However, with the onset of Hurricane Matthew, GBPA, as the regulator, worked with GBPC to approve a 5-year rate stabilization plan. This allowed GBPC to recoup the $27.5m in Hurricane Matthew recovery charges through cost savings on its fuel hedging program.
The rate stabilization plan would have delayed the implementation of the Self-Insurance Fund until 2022, after Hurricane Matthew charges were fully recouped. This, however, was contingent on the island not experiencing another catastrophic event within that 5-year period.
Karla McIntosh, General Counsel at Port Group Limited, stated, “The regulatory framework agreement governs the rate setting protocols and reporting requirements for the GBPC, including a mechanism to recover costs associated with natural disasters.”
Ms. McIntosh added, “We have worked with the utility to ensure efficiency of operation, necessary capital investments, and quality of service. With regulatory oversight, this was achieved with no increase to rates since the establishment of the framework agreement in 2013. Unfortunately, Hurricane Dorian had a disastrous impact not only to life and property, but also substantially impacted Grand Bahama Power Company’s generating, transmission and distribution assets. The full cost of restoration associated with Hurricane Dorian is approximately $15m.”
For transparency, GBPC has been directed to identify the Storm Recovery and Stabilization Charge on customers’ bills as a separate line item. The charge, which comes into effect April 1, 2020, is as follows for each category of customer:
• Residential – $0.013/kWh
• Commercial – $0.008/kWh
• GSL (industrials) – $0.010/kWh
For the average residential customer, it will represent a less than $7 charge on their bills and for the average business customer, $24. This charge does not represent an impact to base rates, but is a full pass-through associated with Hurricane Dorian recovery and an insurance fund for future events.
GBPA has ensured that there will be clear, transparent management and reporting of the fund. Legal mechanisms have also been put in place to ensure the integrity and protection of funds collected.