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{"source_url": "http://tribune242.com", "url": "http://tribune242.com/news/2019/dec/31/bpl-fuel-charge-probe-first-step-over-regulation/", "title": "BPL fuel charge probe \u2018first step\u2019 over regulation", "top_image": "http://thetribune.media.clients.ellingtoncms.com/img/photos/2018/04/19/11102017_BPL2JPG_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d", "meta_img": "", "images": ["http://thetribune.media.clients.ellingtoncms.com/static-3/thetribune/images/obituaries.jpeg", "http://thetribune.media.clients.ellingtoncms.com/img/photos/2018/04/19/11102017_BPL2JPG_t670.jpg?b3f6a5d7692ccc373d56e40cf708e3fa67d9af9d", "http://thetribune.media.clients.ellingtoncms.com/static-3/thetribune/images/special-features.jpg", "http://i.imgur.com/fDh90ja.jpg", "http://thetribune.media.clients.ellingtoncms.com/static-3/thetribune/images/pdf-edition.jpg", "http://c.statcounter.com/7859479/0/16c5ae61/1/", "https://i.imgur.com/B9cOe6l.jpg", "http://i.imgur.com/weF6a.jpg"], "movies": [], "text": "By NEIL HARTNELL\n\nTribune Business Editor\n\[email protected]\n\nA Chamber of Commerce director yesterday voiced optimism that regulators are poised to take \u201cthe first step\u201d in ensuring Bahamas Power & Light (BPL) fulfills its obligations towards consumers.\n\nDebby Deal told Tribune Business she drew encouragement from the Utilities Regulation and Competition Authority\u2019s (URCA) planned probe into how BPL calculates its fuel charge as a sign that it will increasingly bare its supervisory teeth towards the state-owned energy monopoly.\n\nThe head of the Chamber\u2019s environment and energy committee, she said URCA\u2019s just-unveiled draft 2020 annual plan also explained that a lack of funding and staff with the necessary expertise had impeded its initial efforts to properly regulate BPL.\n\n\u201cI can see now why URCA was not much in the picture as it didn\u2019t have the resources to do what it needed to do,\u201d Ms Deal added. \u201cThat\u2019s good for us to know. A lot of us wondered why URCA was not in the picture - we saw a lot of fines for BTC on the communications side, but very little to do with BPL. They didn\u2019t have the funds to hire the staff to do what they needed to do.\n\n\u201cNow they will expand their staff we\u2019ll be able to see better results, maybe, in the actions of BPL if they are questioned as to what they\u2019re doing. Whether that happens is a whole different ball game.\u201d\n\nMs Deal added that URCA\u2019s planned investigation into BPL\u2019s fuel charge, which typically makes up 50-60 percent of consumer bills, was \u201cgood news even if they find nothing\u201d as it suggested the regulator was prepared to act in the interests of consumers.\n\n\u201cI\u2019m very grateful that this might be the first step in making sure their [BPL\u2019s] actual mandate comes to fruition. BPL is supposed to provide safe, reliable and cost efficient energy, and for 40 years they\u2019ve not given us safe, reliable and cost efficient energy,\u201d she told Tribune Business. \u201cNow they can start looking into some of this stuff.\u201d\n\nThis newspaper reported last week that URCA is set to examine whether BPL customers have suffered \u201cpossible harm or mischief\u201d after detecting \u201ctroubling trends\u201d in how it has been calculating fuel charges.\n\nThe regulator, in its just-released 2020 draft annual plan and budget, pledged to impose \u201cclear regulatory oversight\u201d over how BPL determines this portion of customer bills given that it can create \u201cinefficiencies causing significant cost to consumers\u201d.\n\nIdentifying this as a major 2020 priority, URCA revealed it plans to \u201cdevelop a comprehensive methodology\u201d for how such fuel charges are calculated and applied at both BPL and throughout the wider Bahamian energy industry.\n\nIt admitted it had wanted to undertake such a \u201cregulatory intervention\u201d in 2019, but was thwarted by a \u201clack of available resources\u201d - something that has plagued URCA\u2019s efforts to oversee the Bahamian energy industry ever since it took on this responsibility in 2016.\n\nHowever, the regulator said its New Year\u2019s objectives are to ensure \u201cthe fuel charge accurately reflects the actual cost of fuel used by BPL in providing electricity to its customers\u201d, and that \u201cthe fuel charge only reflects the fair and efficient costs of fuel used, and does not pass on costs resulting from failures by BPL to properly manage its electricity system\u201d.\n\n\u201cOver the course of 2019, URCA has reviewed the gazetted rules pertaining to the calculation and application of the fuel charge, and tracked the posted fuel charge for the period,\u201d it said, \u201cnoting trends which are of concern to URCA, particularly in relation to costs experienced during BPL\u2019s period of supply challenges in New Providence during 2019.\n\n\u201cIn reviewing the need to address any possible harm and/or mischief that may have been caused to consumers through the fuel charge during the period, URCA is currently seeking to address BPL\u2019s power quality deficiencies during 2019 through a comprehensive investigation.\u201d\n\nURCA added that this probe will be able to address \u201cany fuel charge impact\u201d that BPL consumer suffered in 2019, and unveiled its \u201cfuel cost recovery\u201d regulation project for the new year.\n\n\u201cMoving forward, and noting that the fuel charge mechanism can result in inefficiencies causing significant cost to consumers, URCA considers it necessary to ensure that there is clear regulatory oversight of the fuel charge approach wherever it is employed in The Bahamas,\u201d URCA said.\n\n\u201cURCA therefore proposes during 2020 to develop a comprehensive methodology for the derivation and application of fuel charges within the sector.\u201d\n\nThe \u201cfuel charge\u201d portion of BPL bills is designed as a pass-through, meaning that the utility passes on to consumers the full costs associated with purchasing the fuel used to generate electricity. It is supposed to be a \u2018cost recovery\u2019 mechanism, meaning that BPL earns no profits from the fuel charge.\n\nHowever, there have long been suspicions that BPL uses the \u201cfuel charge\u201d to disguise inefficiencies elsewhere in its operations, and wraps other items into this levy that further burden Bahamian businesses and households besides the pure costs of fuel.\n\nThe language in URCA\u2019s draft 2020 annual plan will likely reinforce such fears, and suggests there may be some credibility to these concerns. The issue is a vital one for Bahamian households and businesses, especially if they are being forced to unduly pay for BPL\u2019s inefficiencies, given the portion of customer bills that the fuel charge typically accounts for.\n\nURCA\u2019s ambitions are also likely to be greeted with some scepticism given its confession that the energy sector has operated without effective regulatory scrutiny despite being handed this responsibility in 2016 with passage of the Electricity Act.", "keywords": [], "meta_keywords": [""], "tags": [], "authors": [], "publish_date": "Tue Dec 31 00:00:00 2019", "summary": "", "article_html": "", "meta_description": "A Chamber of Commerce director yesterday voiced optimism that regulators are poised to take \u201cthe first step\u201d in ensuring Bahamas Power & Light (BPL) fulfills its obligations towards consumers.", "meta_lang": "en", "meta_favicon": "", "meta_data": {"description": "A Chamber of Commerce director yesterday voiced optimism that regulators are poised to take \u201cthe first step\u201d in ensuring Bahamas Power & Light (BPL) fulfills its obligations towards consumers.", "og": {"title": "BPL fuel charge probe \u2018first step\u2019 over\u00a0regulation", "type": "article", "url": "http://www.tribune242.com/news/2019/dec/31/bpl-fuel-charge-probe-first-step-over-regulation/"}, "viewport": "width=1020"}, "canonical_link": "http://www.tribune242.com/news/2019/dec/31/bpl-fuel-charge-probe-first-step-over-regulation/"} |