Bahamas: Businesses Voice Concern On New BPL Rate Structure.

• Concerns were voiced that Bahamas Power & Light’s (BPL) new rate structure could undermine economic competitiveness and increase inflation by raising energy costs for many businesses.
• Jobeth Coleby-Davis, Minister of energy and transport, wrote to Tribune Business that BPL’s revised fuel charge arrangement, effective July 1, 2024, applies to “all classes” of customers, meaning residential as well as businesses of all sizes.
• The changes, described as the Equity Rate Adjustment, will give all consumers a 2.5 cent per kilowatt hour (kWh) discount on the first 800 kWh that they consume. But, above that threshold, BPL customers will have to pay a 1.5% charge for every kWh used over and above BPL’s actual cost of fuel.
• The Prime Minister’s Office, giving an example of how this would work, said: “If the [actual fuel charge] is 20 cents per unit (kWh), then the customer will be 17.5 cents per kWh for the first 800 units (kWh). The remaining units (kWh) will be billed at 21.5 cents.”
• However, multiple business community sources pointed out that enterprises of all sizes consume significantly more energy than 800 kWh per month, especially during the upcoming summer period.
• The Bahamian private sector is already faced with higher National Insurance Board (NIB) contribution rates and the insurable wage ceiling come July 1. The revised BPL rate structure is now another consideration entering their strategic planning mix.
• These increases could undermine the competitiveness of these businesses and erode earnings. It could also result in a higher passthrough of prices to customers, resulting in lower demand and higher inflation,.
(Sources: The Tribune & NCBCM Research)