Energy Policy and Utility Advisor
What is the role of the Barbados Light and Power (BLPC) and its Canadian owners, Emera in the energy transition of Barbados?
ANSWER:
The ultimate role of the BLPC as a regulated monopoly for the transmission, distribution and supply of electricity, is to generate and supply electricity to its customers in a manner that is safe, reliable and at least cost.
In aspiring to that ultimate goal, the BLPC should be sensitive to government policy in respect to which energy resources are employed to generate electricity. In the case of Barbados, the Government has mandated 100 percent electricity generated by utility and non-utility renewable energy plants by 2030.
Further, as good stewards of electricity, the BLPC should be forthcoming in making regulatory proposals to the Fair Trading Commission (FTC) that meets the ultimate goal.
In reverse, the BLPC should subject itself to the FTC by providing data and analyses that aid the FTC in its decisions about the economic and technical regulation of the electric sector.
In respect to grid-tied customer generated intermittent renewable electricity (e.g. roof-top solar), the BLPC should make every effort to interconnect and integrate those systems to the grid. This has to be sensitive to the ability and stability of the grid to adsorb such third party intermittent electricity in a safe and reliable way.
Today in the special case of Barbados, the amount of customer generated intermittent grid-tied electricity has already exceed a threshold over which grid stability becomes a major concern.
Above that threshold, the BLPC is compelled to invest in grid reinforcements in order to preserve the stability of the grid. Such investments have been proposed and considered by the FTC in its recent decision. The proposals are at a considerable cost, and are of a long term nature.
Hence there is a need for a comprehensive techno-economic analysis to determine if both the grid reinforcements and the current trajectory (of employing intermittent distributed renewable energy resources) represent the “least cost” option for the overall generation, transmission, distribution and supply of electricity in Barbados.
The recent decision by the Fair Trading Commission focuses on grid reinforcements, however there is no mention about any analysis of the overall trajectory.
Notwithstanding the above, there is the needling issue that the BLPC’s operating license will expire in 2028. Therefore, the utility would be hard pressed to make long term investments without the comfort of having a licence in place under which they could recover their investment through normal regulatory means.
Needless to say, should the BLPC be required to make the investments in grid reinforcements before their licence is renewed in 2028, a non-regulatory mechanism for cost recovery would have to be employed.
Finally, it should go without saying that the role of the Canadian owners of the BLPC is to maximize returns to their shareholders. So far, Emera appears to have done just that, while the BLPC is experiencing a decline in service reliability.
For example, my understanding is that the well capitalised self-insurance fund that Emera found at the BLPC, has been used for the most part to pay for repairs caused by a subsequent tropical storm (Tomas). However, the fund has not been replenished.
Heaven help us if a hurricane should strike Barbados.
Overall this is unacceptable.
Maybe the Government knows perfectly well why it has not renewed the license of the BLPC. Indeed, as far as I am aware, the BLPC approached the Government of Barbados as far back as 2015 in the hope of having their license renewed.
In fact, I was retained by the Barbados office of the United Nations Development Programme (UNDP) to prepare a draft license for the benefit of the Government of Barbados. I do not known what has become of that effort.
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