URCA’S RECENT RULING IN FAVOR OF THE RECENT BPL FUEL HIKES MAY BE IN VIOLATION OF THE LAW

Jan 3, 2023

The Utilities Regulation and Competition Authority (URCA) issued a press statement on

December 15th 2022 where it stated unequivocally that after a comprehensive review of

the recent BPL fuel charge increase and billing tiers, it was satisfied that BPL made an

“adequate” case for the rate increase of as much as 163% for some consumers over the

next 13 months as per its billing tiers. However, if one were to look at the June 2020

amendment to the Electricity Act with respect to how the fuel charge is to be calculated

and passed onto consumers, there seems to be a “disconnect” between what is allowed

by law and what BPL has been allowed to do by URCA, a statutory body that is in place

to protect consumers.

In accordance with the June 2020 amendment to the Electricity Act, fuel charge is to be

calculated as a per kilo-watt hour cost on a monthly basis, and this cost passed on to

each consumer at the same price with the consumer billed at this single calculated rate

in accordance with how much electricity they consumed within that specific month.

Additionally, when the fuel hedging program was put in place in July 2020, BPL was

allowed to charge consumers a flat fuel rate for up to 12 months, keeping track of the

actual cost of fuel in an “over-under” recovery account, and was required to adjust the

fuel rate during the 12-month period if the actual price of fuel was +/- 5% of the flat

fuel fee that was being charged to customers. In examining what happened to the fuel

charged when the Davis Administration failed to conduct the requested fuel hedge

transaction in October 2021, and the resulting press release from BPL in February 2022

to increase the fuel charge by more than 30%, the Davis Administration made a decision

to “subsidize” the fuel costs to the tune of millions of dollars per month, possibly

circumventing the law at that time.

Why didn’t URCA make a formal statement to the public regarding whether or not BPL

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and the Government of the Bahamas violated the law?

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Now BPL has decided to bill customers differently for fuel costs based on their electricity

consumption levels, but there is no provision in the amendment to the electricity act to

support this. URCA needs to provide details on how BPL determined the different levels

of billing for fuel to their customers, and how they came to a conclusion that BPL is in

compliance with the law.

The Bahamas is a country of laws and as such consumers have the right to take matters

to court should they conclude that they are not being treated fairly under the law. Has

URCA considered the possibility of a class action law suit brought against URCA and BPL

by consumers, especially small, medium, and large business who are bearing the bulk of

the 163% increase in fuel costs which could lead to as much as a doubling of their

overall electricity bills next summer.

The June 2020 amendment to the electricity act was set forth to allow for the billing of

all consumers equally depending on their total consumption, rather than billing them

differently with tiered pricing according their consumption levels. URCA needs to come

clean to BPL consumers by making public their comprehensive assessment of the price

increases, and explain why BPL’s new tiered fuel billing policy is in compliance with the

law.

The Hon Michael C Pintard

Leader of His Majesty’s Loyal Opposition Leader of the Free National Movement

2nd January 2, 2023

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