GB Power Company’s SRS charges delayed

SRS DELAYED – The Grand Bahama Power Company (GBPC) and its regulator, the Grand Bahama Port Authority (GBPA) announced that the proposed Storm Recovery and Stabilization (SRS) charge will be delayed to January 2021. Pictured (insert) is GBPC Corporate Communications Manager Cleopatra Russell. (PHOTO: TFN FILES)

After coming under attack in the past several months for the proposed Storm Recovery and Stabilization (SRS) charge, expected to be added to customers’ bills, a Grand Bahama Power Company (GBPC) executive sat with this daily for a candid interview recently.

GBPC Corporate Communications Manager Cleopatra Russell explained (Tuesday, September 22) that the Storm Recovery and Stabilization (SRS) charge, in part, allows the company to recoup the cost for restoration after Hurricane Dorian, for assets that were not insured.

“During Dorian, much like most of the island, we had substantial damage to our infrastructure, to our buildings, our generation facility, our transmission and distribution system and our vehicles.

“Our buildings and our energy plants, those were insured because that’s physical assets. Our transmission and distribution system, we are not able to get insurance for those assets. Nowhere in the western hemisphere are you able to get insurance for those assets,” she said.

“As per our regulatory framework we would apply to our regulator (Grand Bahama Port Authority) to have those costs recouped. That was approved in February (2020) for implementation on April 1, 2020.

“With the pandemic and the first set of lockdowns coming into effect in March, we made a decision, after consultation with the regulator, to delay the implementation of the charge,” Russell noted.

She added that at present the implementation of the charge is still delayed.

“We know that customers, right now, are still rebuilding from Dorian. We are very conscious of the economy and the role we play … that’s one of the reasons why in the aftermath of any storm, we work efficiently and expeditiously to get the island restored so as to ensure the economic activity can quickly resume.

“Therefore, SRS is something that is necessary for GB Power to remain a healthy utility that can always respond to like-storms in that manner,” Russell said.

She reiterated that the costs that the company is attempting to recoup, relate to the items that were not insured.

To date, the cost to customers has yet to be determined; however, GBPC officials are very cognizant of the state of the economy.

Hurricane Dorian was an unprecedented storm, she added. 

“We would have sustained considerable damage to our generation facility. Everyone and every business on the island was impacted in some way.

“Our main engines are still down, our transmission and distribution centers, our headquarters were all damaged. So, we are well aware of the impact that Dorian had. We are still working in East GB.

“We are trying to balance being a healthy utility and making sure that whenever another storm hits, in like manner, we can be ready. Sadly, these storms are coming fasters and more powerfully, and they keep coming to us," she noted.

She spoke also of Hurricane Matthew of 2016.

"There was Hurricane Matthew in 2016; then we were faced with Dorian last year. So, we understand, but we want to remain a balanced, healthy company,” Russell said.

On Thursday (September 24), company executives published an open letter to its customers on their Facebook Page.

The communication explained the company’s reason for the charge and the decision to further delay its implementation.

Following is the statement in its entirety:

An Open Letter to Our Customers
GBPC to further delay Storm Recovery & Stabilization charge

Over the past few weeks, Grand Bahama Power Company (GBPC) has seen misinformation in the public arena regarding our Storm Recovery and Stabilization (SRS) charge. We wanted to take an opportunity to share with you the facts about the SRS charge and why it is necessary.

First and foremost, it is important that you - our customers - know that we are committed to the economy of Grand Bahama. We continue to do our part to strengthen and grow Grand Bahama’s business sector through our partnership with the Grand Bahama Port Authority (GBPA) and our continued commitment to the Economic Development Rate to stimulate development of new businesses on the island.

We’re customers too, and we know that, regardless of the amount, no customer wants to see a new charge on their bill. We also know that there will never be an opportune time to implement a new charge.

Here in Grand Bahama, as in the rest of The Bahamas and the wider Caribbean, we are at high risk of significant, damaging weather events, and the risk seems to be increasing each Hurricane Season. We have seen more than enough evidence of this in recent years with Hurricanes Matthew (2016), Irma (2017) and Dorian (2019), and we have learned how critical timely recovery of electricity supply is to the economic health of Grand Bahama.

As a responsible business, we insure all that are insurable - our buildings, plants, vehicles and substations. But, as with all electric utilities in our region and far beyond, transmission and distribution infrastructure – the poles and wires that bring power to your home or business – are not insurable. Recouping actual costs for restoration of these assets through a storm recovery charge or similar is common among power companies throughout the world.

Through prudent operational cost management and strategic fuel purchase strategies, we were able to delay implementation of the SRS charge following restoration from Hurricane Matthew. And we continue to practice these important cost-saving initiatives today. But, following Dorian’s $15.6 million restoration, those measures alone are not enough to enable us to recover those uninsurable storm costs without the implementation of the SRS charge.

We can’t predict storm impacts from season to season – or even from storm to storm – so we cannot build into rates an amount that would accurately and fairly cover storm costs. The SRS charge, which was approved by our regulator only after careful review of Dorian-related restoration costs, enables us to recoup only those costs incurred in recovering from the September 2019 storm. In other words, customers are only charged the amount spent and approved for restoration.

The SRS charge is based on consumption, so it will fluctuate month-by-month depending on customers’ power usage. With prudent energy use, customers can reduce their SRS charge and overall bill. We’ll be sharing energy saving facts and tips in the coming weeks to help you realize lower monthly electricity costs.

Recouping storm costs enables us to be a healthy utility, delivering on our customers’ needs across the island every hour of every day, and quickly and safely following significant weather events such as Hurricanes Matthew and Dorian.
While the SRS charge must be implemented, after careful consideration and consultation with key stakeholders, we have decided to further delay the implementation of the charge and not implement on October 1 as previously communicated. We’ll communicate updates with you via our social media feeds, so we invite you to stay tuned.

We can’t predict the weather but, as your electric utility provider, we can promise a few things such as working to continuously improve our reliability to serve you better, and continuing to find ways to manage our costs so that we can help you manage yours. We’ll also continue to work with you, especially over the coming months as the SRS charge is implemented, to find ways to reduce your energy bill.

As always, we will continue to support our communities as a whole including ongoing work with civic organizations to help the neediest among us with recovery, and by helping to continue the education of children during this challenging school year through donations of tablets and other tools that support a virtual learning environment.

GBPC employees take great pride in their work and in the essential service they provide to their communities and, together as a company, we are committed to the recovery, wellness and prosperity of Grand Bahama.”

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