Statement from the Office of the Prime Minister on The Government’s Approach to Energy Reform

A New Era of Energy Reform Is Lowering Electricity Prices –

Prior Administration’s Energy Policies Brought Only Fiasco and Failure

For far too long, high electricity prices and inconsistent supply have been a significant burden to Bahamian families and an obstacle to business expansion and economic growth in our country.

The Davis administration took office during an economic crisis, a fiscal crisis, and a health crisis, and swiftly moved to address all three, with substantial progress underway and proceeding on all fronts.

The Davis administration also met in place a Bahamas Power and Light (BPL) deeply in crisis – $500 million in debt, with essential parts of the nation’s electricity grid in danger of collapse, an unfunded pension liability exceeding $120 million, insufficient generation capacity, and substantial operational challenges, including no capacity to transmit cleaner energy and extreme vulnerability during storms. Throughout the Minnis administration, Bahamians paid high electricity bills and suffered frequent power outages.

The Davis administration is the first Bahamian government to take on all of this sector’s myriad and complex challenges, rejecting a piecemeal, band-aid, patchwork approach, and instead implementing the country’s first nationwide, comprehensive energy reforms. The new reforms include a transition away from heavy, expensive fuels to solar energy and natural gas; island-specific plans for our Family Islands, in partnership with multiple Bahamian-owned companies; and an extensive modernization, strengthening, and upgrade of the nation’s electricity infrastructure. 

These energy reforms are already making a difference, with much more progress still to come. A new energy era, with reasonable prices and stable supply, is essential for our nation’s next stage of development, including a more dynamic economy in which more Bahamian entrepreneurs and businesses can succeed.

On the surface, the Leader of the Opposition’s attacks against progress in our energy sector make no sense; dig deeper, things get even worse for him.

First of all, of course, there is the Minnis-Pintard record when it comes to BPL – one of murky deal-making, mismanagement, and malpractice. Many big promises were made, none were kept.

Consider this:

  • A report produced during their tenure said that key parts of the grid were approaching “end of life” status, yet they made no significant upgrades to the transmission and distribution system during their term.
  • The centerpiece of their efforts was the acquisition of Wartsila engines — one of the costliest, worst-executed, and most misleading projects in our energy sector’s history.
  • The engines were touted as “tri-fuel” capable, including LNG. That was false. Under their own instruction, the engines were stripped of their gas-ready features before delivery. Converting them to use LNG now would cost millions.
  • They installed these engines in a building that was already structurally unsound. Today, BPL cannot safely run all seven engines at the same time due to the compromised condition of Station A.
  • They chose a transformer configuration that increased the risk of multiple engine failures—departing from BPL’s standard practice and creating additional operational risks.
  • They committed over $100 million for a plant that has not delivered on its promised reliability or output.
  • They locked BPL into an inflated operations and maintenance agreement with Wartsila, costing more than $24 million before it had to be terminated for poor performance.
  • An internal report documented a messy board breakdown and serious questions about transparency.
  • A failed Rate Reduction Bond process wasted over $20 million in professional fees.
  • A $70 million VSEP package weakened BPL’s operations and led to increased costs.
  • A $7 million deposit was paid to a landowner for BPL to acquire land, but the balance was unpaid, so the landowner kept the $7 million AND the land. 

With what authority does the Leader of the Opposition launch his attacks, given his administration’s record of fiasco and failure? 

An internal report they commissioned themselves (FTI Consulting) describes their time in charge of BPL in the following way: a “lack of a coherent approach”, “disorganization”, and “confusion”, not to mention “deficient policy management”, missing documentation, and approval irregularities when it came to the tendering process.

How can Mr. Pintard now speak about LNG, when the engines he and his government touted as central to their strategy weren’t even capable of running on LNG?

During his long-winded speeches attacking the country’s partnership with Shell, does he internally experience shame or discomfort, knowing that not only did his administration partner with Shell, but they also intended to give over Station A at Clifton Pier to Shell entirely?

Facts are facts, no matter how inconvenient to Mr. Pintard:

  • Shell is a leading LNG supplier globally, in addition to being the historical fuel supplier of BPL.
  • Instead of awarding a generation contract to a foreign fuel supplier, under this Administration, a generation contract was agreed to with a Bahamian company – one that is already renting generators to BPL. Including the rental arrangements, the Power Purchasing Agreement is saving tens of millions a year. 
  • Instead of awarding the LNG terminal solely to a foreign entity, we insisted on a joint venture with a Bahamian company that had the capital and expertise to pull it off. 

Mr. Pintard has never put forward a credible energy plan, and never will. His specialty is talking, not working, with a subspecialty in negative attacks.

He attacked the government when we raised the minimum wage, he attacked the government’s free breakfast programme for our schoolchildren, he attacked the government for standing up to the Grand Bahama Port Authority on behalf of Bahamians, and now he’s attacking the government’s energy reforms, despite the much-needed changes they are bringing.

The Davis administration remains focused on solutions: bringing online utility-scale renewables, modernizing the grid, implementing LNG in a structured and scalable way, and ensuring long-term energy affordability and stability for Bahamian families and businesses.

The comprehensive approach our administration is taking requires numerous agreements, all of which will be tabled in Parliament next month. 

We also urge Bahamians to read about the New Energy Era reforms in detail on our website, opm.gov.bs/newenergyera, and to look out for a full report that will be published and distributed as well as added to the site. 

Until now, for most Bahamians, their monthly electricity bill has been second only to their housing costs as a burden on family and business finances. 

High electricity bills have acted as an obstacle to growth, development, and diversification – with high operating costs impacting investment decisions and the capacity of local businesses to expand and create new jobs.

When we decided to take on the whole sector – to leave behind the short-term fixes, to replace stopgap solutions with innovative and comprehensive solutions – we did so because of our unshakeable belief that the Bahamian economy can be so much more – more competitive, more successful, more dynamic, and above all, more inclusive – with more paths to security and prosperity for more Bahamians.