Tangled Webs and High Light Bills

Submitted by Observing

The good thing about having wall flies as friends and white rum bottles as magnifying glasses is that sometimes the random story pops out. Last night under the moon in the glare of a pint was one of those nights.

Barbados woke up to the appointment of an Acting Registrar by the name of SD. Congrats SD!!!

But, does the average Bajan know the intertwinnings, interwranglings and woven webs that may have an impact on their lives and cost of living?

Let the rabbit hole begin.

SD according to LinkedIn is the substantive Chief Legal Officer in the Ministry of Housing.

Recently she was the Acting Public Counsel for the Ministry of Energy and Business Development.

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BLPC Rate Case – Closing Statement of Cooperative Coalition


Submitted by the Cooperative Coalition – Trevor T Browne Lt Col (Retired) SCM, CCM, MEMOS, BSc (Hons) FBAPE

It has been an honor and privilege to represent the Coalition of Cooperatives and Concerned Citizens in this important Electricity Rate Review hearing. On behalf of my co-intervenor Mr Hally Haynes and myself, we thank the Chairman and Commissioners, the Director and Staff of the FTC and all of our fellow intervenors
for all the support and encouragement which we received.

Thanks also to the BLPC team, whose professionalism we feel compelled to admire, even as we challenge the flawed narrative which they have attempted to put to the Commission. At the end of the Hearings, The Coalition is even more concerned than we initially were, about the urgent need for radical reforms in Energy management in Barbados.

Local National Energy Legislation has wisely established BLPC as a REGULATED PUBLIC UTILITY to serve the Public Good of Barbados. For over 100 years, this structure served the electricity needs
of Barbados well, with representation from all Stakeholders.

From 2011 to 2014, Emera Inc of Canada acquired 100% of BLPC shares and in our assessment, proceeded to completely transform the company from a regulated Electric Utility, into a mechanism to generate cash for its new sole shareholder.

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EMERA Wants Increase!

It harrows the blogmaster with fear and wonder (thanks Artax) that the Barbados Light and Power company (EMERA) sees it fit and proper to apply for a rate increase. The company in its PR communication to deflect the decision assures low income households the increase to billing will be negligible IF approved by the Fair Trading Commission (FTC). The assumption is that the middleclass and others will have the capacity to absorb what is estimated to be upwards to a 20% increase in monthly billing.

The question from a lowly blogmaster is why does Barbados find itself in a position where EMERA feels justified to request a rate increase. Under the previous Democratic Labour Party government there was a push to aggressively implement a vibrant renewable sector with the objective of weaning our dependence on Barbados Light & Power as the controlling power source. Several years later the question we are justified to ask is – are we there yet?

The country is currently consumed with Covid 19 narratives but walking and chewing gum still apply. An affordable energy cost is critical to managing the cost of living in Barbados.

Source: CBC

Lights Out!

Following the ongoing national debate about the response by EMERA to post-Elsa damage to its network gets the blogmaster’s dander up. In 2012 the BU family predicted the decision by the NIS Board chaired by Tony Marshall to dump our shares in Barbados Light and Power (BL&P) to Canada-based EMERA would comeback to haunt us. ALL sensible Barbadians agreed at the time that BL&P was a strategic asset and any smart government should have seen the merit to ring-fencing the ownership – see BU Archive. The government received pieces of silver to bolster the foreign reserves and as we did in 2003 with the sale of the Barbados National Bank to Republic Bank the decisions of key companies operating in Barbados are being made offshore.

Better late than never is the saying. Barbadians are correct to question EMERA’s disaster recovery plan (DR) in light of what transpired with the passing of Hurricane Elsa as a CAT 1. What if…?

  • Is the Disaster Plan designed to optimally respond to unplanned incidents like natural disasters and other disruptive events?
  • Is it a regulatory requirement for EMERA’s Disaster Recovery Plan to be submitted to the Fair Trading Commissions (FTC) or relevant government agency to ensure there is alignment with a national standard?

The BL&P enjoyed an excellent reputation with Barbadians in the period before the sale to EMERA for power uptime, customer service and pole maintenance to list just three. Information is abroad that many jobs were retrenched and others outsourced to sub contractors when EMERA bought our strategic asset. Did Hurricane Elsa as a CAT 1 hurricane expose EMERA’s Disaster for Barbados?

Chris Halsall

The blogmaster is aware Transmission and Distribution (TD) of electricity is a highly technical area and reached out to Chris Halsall who has acted in the role of intervenor in FTC Rate Hearings to assist with the post Hurricane Elsa review.

A natural monopoly is a type of monopoly that exists typically due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry which can result in significant barriers to entry for potential competitors. A company with a natural monopoly might be the only provider of a product or service in an industry or geographic location. Natural monopolies can arise in industries that require unique raw materials, technology, or similar factors to operate.

Investopedia

To understand why the electric company is a strategic asset and should not have been sold to EMERA is to accept that it is a natural monopoly. And efficient electric company is a requirement for a productive Barbados. Are we confident the FTC and Ministry of Commerce will protect the rights of Barbadians proclaimed under the Consumer Protection Act? Is it a case that at the end of the day EMERA will simply continue to invest in new deployment and expend on maintenance as they see fit by passing the costs to the consumer along with their allowed 10.4% ROR on the “Rate Base”?

This critique is not directed at the linemen seen scaling poles at ungodly hours during the last week to return households to full service. We have a tendency in the hysteria of the moment to conflate issues.

We turn our attention to EMERA’s pole plant:

1.  Poles
1.1.  There are many instances where poles are not vertical.  This is a good indicator the pole requires maintenance.
1.1.1.  It doesn’t take much effort to find poles mounted side-by-side, one or both leaning, tied together.

1.2.  Related to this are cases of vines growing on the poles and/or trees growing near them.
1.3.  Pole maintenance cost money.  This will, of course, have to be passed onto the Consumer.
1.4.  This is the “Layer 0” in the OSI model for wired connections – https://en.wikipedia.org/wiki/OSI_model.

2.  Cables
2.1.  As was documented at some length during the Rate Hearings way-back-when, “Pole attachments” are a big deal. They are why the poles exist at all.
2.2. The topmost attachment areas are for cables that deliver electrical power by way of Transmission (one or three phases of *very* high voltage).
2.3.  Next down is for Distribution (one to three phases of ~110V; two plus neutral is the most common).

2.3.  Then at the very bottom areas are for the various telephony providers to attach copper pairs (legacy), Coax cable (legacy), and/or Fiber (GPON, etc).

2.4.  The cables also require maintenance.  IMO, the telephony providers have not been maintaining their cables as well as they might.
2.5.  Cables are the “Layer 1” in the OSI model, and are the only options for power.

3.  Situational awareness
3.1.  Although BL&P has invested in “Smart Meters”, it would be interesting to know if this fed into their SCADA systems.

3.2.  It might be worth looking at having “Crowd-Sourced” knowledge of poles and/or cables which should be reviewed.
3.3.  The BL&P App needs which facilitates reports of faulty poles, light etc needs to be aggressively promoted and details of the reports and follow up shared with the public. To many anecdotal stories of reports of leaning poles with no apparent response from the power company.

4.  Alternatives
4.1.  Underground cables are less susceptible to winds, but are to flooding and are much more expensive to deploy.
4.2.  “Smart Grid” technology could make the grid more resilient.  But that’s a very long-term discussion.

Although this blog focuses on the quality of response post Elsa by EMERA, it is worth mentioning the number of poorly constructed homes damaged or destroyed and the inability of successive governments to legislate and enforce a building code.

Barbados Gone Dark

The following is a statement issued by the MD of Barbados Light & Power a few minutes ago. Prime Minister Mia Mottley has demanded a meeting with the Chairman of EMERA this evening.

Several stories have been floating about social media in the last 24 hours, BU will stay with the official positions issued by the BL&P for the moment.


Roger Blackman, Managing Director of BLPC

The Barbados Light & Power Company Limited (BLPC) wishes to update Barbadians on the electricity outages that have occurred this week. We recognise that this affects our nation’s productivity and ability to serve your own customers and clients. For this, we sincerely apologise and wish to assure you that we are taking this very seriously. Our teams are assiduously working to bring full restoration back to our island.
BLPC uses Heavy Fuel Oil to produce electricity to meet the needs of our customers. At present, we are experiencing a Heavy Fuel Oil quality issue, which has been plaguing us for an extended period. The presence of contaminants detected in the Heavy Fuel Oil is the main cause of the challenges we are experiencing.
The outage events which occurred this week are extraordinary events originating with a switch failure in one of our Spring Garden substations, and during that restoration process, a second event occurred on Tuesday morning with a fault on one of our generating units. In both cases system protection response is being investigated.
Over the past few months, to compound the restoration and supply issues, we have been investigating oil quality issues which are prematurely damaging equipment used to feed oil to our generating units. At present, generating units that we would normally rely on to supply electricity demand have periodically been shutting down due to the fuel issues and this has slowed the pace of restoration.
We are working with our fuel supplier and other stakeholders to hone in upon the specific cause and source of potential contamination from their suppliers, which is ongoing. We have been staying ahead of these issues while we completed other maintenance and repairs to the remainder of our generating fleet, however, this week highlighted the challenge we have been working through to prevent such an event from occurring.
We wish to thank you for your patience, support and encouraging words as we work through this period. We are meeting with the Prime Minister, other Government officials and the Barbados Water Authority this evening to give a comprehensive update and to provide an update on our status and plans going forward to resolve our challenges. We will of course keep you updated of any significant changes as things evolve.
The Chairman of our Board Rick Janega from Emera is on island and will be a part of the meeting with government.

BL&P’s Promise to Barbadians — You Must Invest in Community Solar

He added that Light & Power is also planning “community solar to ensure that every Barbadian has the opportunity to participate in the island’s green transformation and the renewable energy future for Barbados.” – Roger Blackman, Managing Director (BLP)

The Barbados Light & Power in its recent edition of Watts New Business Managing Director Roger Blackman reassured the audience that his company is committed to a 100/ 100 vision of 100% renewable energy. This is good news for some of us who appreciate that a sustainable power supply that is affordable and a strategic fit for a Small Island Developing State is the commonsense approach.

The reference by Blackman to “community solar” should pique the interest of all Barbadians who have had to labour in an investment market of reduced interest rates and extension of bond maturities. There is no reason why the public and private sector should not structure investment opportunities for ordinary citizens to invest in growth areas. Barbadians have always been a thrifty people and this behaviour is reflected in the billions of dollars which continue to nestle with financial institutions. The fear for many is that if citizens see no appealing avenues to invest they will stop saving and engage in greater consumption behavior which the country cannot afford given the forex earning constraints.

It hasn’t gone unnoticed that Wigton Windfarm in Jamaica is about to list on the Jamaica Stock Exchange (JSE) with an IPO and Prime Minister Holness has been encouraging ordinary Jamaicans to grab the opportunity to invest.  It is a nobrainer for private and foreign investors – with good reputations – to see the benefit of an adequate rate return by investing in a growth area. It is a no brainer that government and private sectors have a vested interest is creating an optimal climate for investment by creating the best investment products. The blogmaster notes that the proposed GAIA PPP floated by the government accommodates worker participation.   The  business models practiced by Williams Group of companies and a few others in Barbados should be standard modus operandi as we work to make Barbados great again. Trade Unions calling striking action for a 1% or 2% wage increase has become redundant. All collective bargain agreements should demand worker participation.

The financial sector continues to demonstrate its unwavering commitment to maintaining shareholder value during times of austerity. The government must pave the way for a new business model to emerge that will sustain national development and enfranchise Barbadians. If we do not do it, who will?

We are Barbadians, we can do this!

Credit to sirFuzzy.

 

Cost of Living Alert: BL&P to Submit Application for Rate Increase

bl&p

Source: Fair Trading Commission (FTC)

Amid the din of post-Christmas activity the FTC posted a notice requesting technical assistance to support a rate review in the second quarter 2019. A worst case scenario for Barbadian consumers to consider is that the BL&P will be granted the increase.

One does not require deep dive analysis to gauge the state of mind of Barbadian consumers, we are a citizenry suffering from economic fatigue.  The blogmaster is of the view the fatigue state of mind of the electorate largely resulted in the 30 zip defeat of the Democratic Labour Party (DLP) in the last general election.

Electricity is a significant input cost in the production process. To our credit we have been developing alternative energy sources, however, it is still at a nascent stage. An increase in electricity rates will have a significant impact on the Barbados Water Authority (BWA) cost to pump and distribute water. The upside is that it may speed up the implementation of alternative power sources by that utility company.

There can be no argument that an increase in the electricity rate will drive the cost of living upwards. The business sector continues to be affected by the removal of the road tax and imposition of the fuel tax.

It makes no sense for Barbados to be boasting about  generating energy from alternative sources and at the same time consumers are asked to suffer an increase in electricity rates.

 

 

 

No Power… No Vision

barbados

The Barbados Light and Power Company (BL&P) is one of the local utilities most Barbadians will agree has provided a better than satisfactory level of service through the years. The blogmaster does not have access to the ‘power outage’ history of BL&P since it was delivered to the Canadian power company EMERA. However, if one were to go by the anecdotal it seems the company has struggled under new ownership to sustain the high level of service Barbadians have become accustomed. Even the monkeys making mock sport at dem!

There was an island wide power outage on the 8 January 2018 at 3PM and at the time of updating this blog areas of Barbados remain dark as well as with intermittent service. According to social media reports the power company has advised that its Seawell substation in Christ Church is the source of the problem and technicians are working around the clock to fix the problem .

Barbados Underground has always defined the BL&P as a national strategic asset which the government should never have allowed the ownership to slip into the hands of the Canadians for the proverbial 30 pieces of silver. An advantage to being small should be that we are able to build and implement strategic plans to maximize on our resources. The ‘disparate’ approach to how we have been governing this little rock has started to generate undesirable outcomes in every sphere of activity- protracted depressed economic performance, inability to implement a sustainable waste management program; evident by infrequent garbage collection and inefficient sewage disposal, unstable industrial climate, operating at the murder median in the last decade, the rise of NCDs and obesity etc, etc and etc.

The upcoming general election serves as the ideal opportunity for Barbadians and others vested in a well-managed Barbados to up the quality of debate -to do. We have a responsibility to our children and future generations. We have a duty to protect and build on the rich legacy our forefathers have laid for us.

In plenty and in time of need
When this fair land was young
Our brave forefathers sowed the seed
From which our pride was sprung
A pride that makes no wanton boast
Of what it has withstood
That binds our hearts from coast to coast
The pride of nationhood

Come on Barbados, we can do this if we try.

 

BL&P Denied!

ftcIt is with great interest BU read the decision handed down by the Fair Trading Commission to DENY the application by the Barbados Light & Power Company Limited (BL&P)  to apply the results and costs of Fuel Hedging to the Fuel Clause Adjustment (FCA). Some will argue that this is a pyrrhic victory given a prior decision by Barbadians to surrender the BL&P -a strategic national asset-  to the Canadian company EMERA.

We understand why a company like BL&P utilizes hedging to protect its revenue position given the volatility that exist in the oil market. What we do not understand is why BL&P would want to pass the cost of hedging and associated gains or losses onto the consumers of Barbados. Surely in the case of a company like BL&P hedging is considered a core strategy for managing the business. The application to pass the cost of hedging to the Barbadian consumer should be regarded as an insult to our level of intelligence.

Can one expect with BL&P’s application being declined that a fallback strategy will unfold? Many of us are acutely aware the Spring Garden generators are old as one example. We need our local INDEPENDENT analyst to share views on the state of the power supply and generation in Barbados. It is too important a matter to allow foreign interest to dictate.

On a tangential note we find the list of FTC Commissioners interesting read Andrew Willoughby and Kendrid Sargeant.

Here is the decision to deny the application of BL&P by the Fair Trading Commission of Barbados:

Active Image

DECISION

THE BARBADOS LIGHT & POWER COMPANY LIMITED’S

APPLICATION TO APPLY THE RESULTS AND COSTS OF FUEL HEDGING TO THE FCA

The Fair Trading Commission, having reviewed the Barbados Light & Power Company Limited’s (BL&P) Application to apply the results and costs of Fuel Hedging to the Fuel Clause Adjustment (FCA), has moved to deny said Application.

The Commission has determined that:

I. Due to the risks associated with fuel hedging, the BL&P should not be allowed to pass the cost of hedging and associated gains or losses onto the consumers of Barbados.

II. The Applicant has not provided enough evidence to suggest that the Barbadian public is willing to pay for the reduced volatility in fuel prices.

Following receipt of the Application on March 29, 2016, the Commission invited written submissions from interested parties, in accordance with Rule 37 of the Utilities Regulation (Procedural) Rules, 2003 (S.I. 2003 No. 104) (URPR). Five parties, who were granted intervenor status to participate in the process, considered the Application. Several issues of concern were raised by the intervenors, including hedging risk and strategy, related administrative costs and the efficiency of BL&P’s plant.

The Commission reviewed these submissions and also undertook a detailed analysis of the issues involved. This included a review of regional and international fuel hedging case studies, a simulation of fuel hedging within the local market and technical considerations related to the BL&P’s overall plant efficiency.

The findings illustrate that while the implementation of a hedging strategy could reduce the volatility of fuel prices, this potential reduction is often accompanied by a high risk of hedge losses. Also of concern to the Commission was BL&P’s lack of vital evidence to support its Application, such as a detailed hedging strategy and proof that the average Barbadian consumer would be willing to bear the costs associated with a reduction in volatility.

The Decision may be accessed here or obtained from the Fair Trading Commission, Good Hope, Green Hill, St. Michael, Monday to Friday, between 9:00 a.m. and 4:00 p.m.

December 29, 2016

Nekaelia Hutchinson-Holder
Information Specialist
Fair Trading Commission
Good Hope, Green Hill,
St. Michael
E-mail: info@ftc.gov.bb
Tel.: 424-0260

Barbados Renewable Energy Program–A Case of the Tail Wagging the Dog

Senator Darcy Boyce, Minister of Energy

Senator Darcy Boyce, Minister of Energy

The Fair Trading Commission (FTC) recently ruled on the motion for review of the billing arrangement and metering option of the Renewable Energy Rider  (RER) – see FTC Order and Decision . The RER is a mechanism established by government to facilitate the sale of surplus electricity to the grid supplied by customers with Renewable Energy (RE)  systems.

The government of Barbados has committed to facilitate the RE sector as part of sustaining a new economy not overly dependent on traditional economic drivers. The growing energy bill of Barbados and dependence on fossil fuel is a concern. An important strategy therefore is to ensure the legislative and regulatory framework is expertly (sensibly) designed to encourage enthusiastic adoption of RE solutions. Key to a successful RE penetration is aggressive participation by RE providers and confidence by end consumers to embrace RE as a top of mind solution to satisfy energy needs.

For those who have been following the emergence of the local RE sector still at a nascent stage of development, several concerns have been raised by the early adopters.  The most recent FTC hearing attracted submissions from CARITEL, Sir Allan Fields, Dick Stoute, Williams Industries, Solar Watt Systems and John Haywards. Visibly absent from the process was a consumer organization.  Unfortunately the iterations embedded in the RER ‘decisioning’ process is bound up in technical language which the average Barbadian is inclined to leave to the experts to unravel. There is however a basic level of interest and participation all Barbadians should show as it pertains to the development of a national RE program.  We are after all described as an educated and literate group of people.

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Our Energy Policy is Adrift

The positive coming out of the Muni Tax outrage which is embroiling the country is the focus on the need to examine the cost of energy and solid waste disposal management. The overarching issue threading the vexing issues is poor governance; no transparency, and an unwillingness to implement Freedom of Information and Integrity legislation. The rights of citizens in a democracy must be respected by those elected to serve. This government offered to be more transparent than any other in our post Independence history, the fact that transparency legislation remains outstanding 6 years after being elected does not mean it cannot practice transparency in its decision making.

Barbadians want to know what guarantees have been agreed between the PEOPLE of Barbados (government) and Cahill Energy. And we want to know before the project passes the point of no return. To ask questions should not be interpreted as being against the project, although this is a possibility when all the fact are known, it is about being transparent, something which a government led by Mr. Integrity himself has encountered some difficulty.

Here is a blog posted earlier which deserves greater circulation. It deals with the Barbados Light & Power variable in the equation which focuses on the elephants in the room – Barbados Light & Power and Fair Trading Commission. Continue reading

Our Energy Policy is Adrift

The following submission probes government’s energy policy

Barbados Light and Power headquarters on Bay Street

Barbados Light and Power headquarters on Bay Street

Our energy policy is becoming more and more perplexing. So much so that any reasonable person analyzing the decisions and statements of those whose stewardship we depend on for efficient, reliable, sustainable energy practices would conclude that presently we as a nation could not be any further adrift. Commenting on the same issue, and on the need for a coherent energy blueprint, a well-known businessman recently opined that “there does not seem to be a well –defined and quantified, coordinated and integrated energy policy being articulated by government.” While there may be some merit in this statement, many would argue that any incoherence in our energy policy resides mainly in two locations: Spring Garden and Green Hill.

A clear example of incoherent messaging is the Barbados Light and Power (BL&P) advertisement of Friday May 9th in Weekend Nation. In this ad, the company is inviting “expressions of interest” in the building of an 8MW solar plant on 40 acres of land at Trents, St Lucy with a projected completion date of March 2016. BL&P recently completed an Integrated Resource Plan (IRP), a 25 year blueprint which they purport maps “Barbados future power needs and identifies a future portfolio of power generating technologies.” The remarkable thing about this document, which is currently awaiting FTC’s approval, is how rapidly it changes emphasis and direction. It has now had three major revisions in as many months. In the original plan which was valid up to November 2013, utility-scale solar and waste- to- energy (WTE) were not seen as economically viable technologies in the least cost expansion plan. Apparently, they are now, displacing much of the wind generation and some of the low speed diesel capacity, technologies that were previously considered the lynchpin in driving energy costs down.

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EMERA's Barbados Light & Power Company To Apply for a Hike in Rate Soon

EMERA Caribbean President Sarah MacDonald

EMERA Caribbean President Sarah MacDonald

EMERA Caribbean President Sarah MacDonald has signalled that the company will be applying to the Fair Trading Commission (FTC) for a rate increase in the near future. The Canadian owner of Barbados’ sole electricity generation and distribution company intends to build a 60 megawatt power generation plant.  We have been told that the current plant is old and inefficient. The bad news is that consumers are likely see their base rate move up BUT with anticipated improvement in operating efficiency the fuel adjustment should move down giving users a net benefit.

And in related news.

The FTC has completed its review of the best method the Barbados Light & Power must calculate the Fuel Adjustment Clause (FAC). The recommendation from the consultant and accepted by the FTC is that the BL&P will have to use its historical cost of fuel and NOT projected cost when administering the FCA.

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FTC: Managing Energy Cost

It is estimated that the cost of electricity has doubled in Barbados since 2008. We are curious about the process of sourcing Bunker C to fuel Barbados Light & Power (BL&P) generators. How are the generators which use Bunker C integrated into the distribution of electricity to the benefit of the consumer? How has the price of Bunker C trended since 2008 and have Barbadians consumers benefited?

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Fair Trading Commission RENEWABLE ENERGY RIDER Consultation

Submitted by St George’s Dragon

The late Professor Oliver Headley would be disappointed with lack of progress in the alternative energy sector were he alive

The late Professor Oliver Headley would be disappointed with the lack of progress in the alternative energy sector were he alive

The Government wants 29% of all electricity consumption to be generated from renewable sources by 2029. That seems ambitious but it is necessary in order for Barbados to help reduce CO2 emissions and help prevent global warming and rises in sea-levels etc.

Barbados Light & Power (BL&P) has been running a pilot study on renewable energy generation for the last couple of years. Under the pilot scheme consumers could install a photo-voltaic panel or wind-power system and get paid for power fed back into the grid.

The Fair Trading Commission has a consultation paper out on the results from the pilot study and the arrangements for the future including what BL&P should pay us for the electricity we generate from renewable systems.

During the two year period of the pilot scheme only 25 customers joined up. That is a tiny percentage of the number of BL&P customers and the response has to call into question the attractiveness of the scheme. If the terms are not made more attractive the Government’s 29% goal would have to be called into question.

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