By FAY SIMMONS
TRIBUNE Business Reporter
jsimmons@tribunemedia.net
THE GOVERNMENT is developing a national fuel procurement strategy that would combine the purchasing power of Bahamas Power & Light (BPL), Grand Bahama Power Company and the Water and Sewerage Corporation to secure better pricing and terms.
Jobeth Coleby-Davis, minister of energy and transport, outlined the plant to reduce costs for the Government’s public utilities in Parliament yesterday, explaining that it is seeking to use the combined economies of scale from the three utilities to negotiate with suppliers from a stronger position in international fuel markets.
Historically, the utilities have procured fuel separately, despite relying on the same international market. The Government now wants to consolidate their requirements and explore longer-term supply arrangements for diesel, heavy fuel oil and liquefied natural gas (LNG).
“By consolidating their requirements, we can negotiate with suppliers on the strength of combined national demand, rather than approaching the market as separate utilities,” said Mrs Coleby-Davis. “The Bahamas can approach it with one national requirement.”
She added that the approach could also be extended to the procurement of generators, transformers, meters and critical spare parts, creating opportunities to improve purchasing efficiency across the public utilities sector.
The strategy forms part of the wider role being developed for Grand Bahama Energy Company (GBEC), the state-owned special purpose vehicle (SPV) that acquired GB Power, and has since been given a broader mandate to co-ordinate the Government's interest in public utilities.
Under the proposed framework, Grand Bahama Energy Company will oversee enterprise-wide strategy, governance, financial controls, fuel procurement, asset management, long-term capacity planning and debt management, while BPL and GB Power would remain responsible for day-to-day operations and service delivery.
Mrs Coleby-Davis said co-ordinated purchasing could also strengthen energy security by allowing the Government to examine shared fuel storage, strategic reserves, logistics and emergency supply arrangements across the islands.
For an island chain vulnerable to hurricanes and supply chain disruption, she said, fuel security is a matter of national resilience. The implications extend beyond electricity generation, given that water production through desalination is also energy-intensive.
Mrs Coleby-Davis also outlined the Government's objective of moving towards one national fuel charge per kilowatt hour (KWh) for electricity customers, regardless of the island on which they live, subject to the necessary tariff and regulatory arrangements.
She said incorporating GB Power into a national fuel cost pool will expand both the volume of electricity and the eligible fuel costs across which charges could be allocated. However, Mrs Coleby-Davis cautioned that combining fuel costs will not, by itself, reduce total fuel spending.
“The savings must come from more efficient generation, better procurement, fuel diversification and improved operations,” she said.
The distinction is important because a common fuel charge would change how eligible fuel costs are shared, while actual savings would depend on whether the utilities secure better purchasing terms or reduce the amount and cost of fuel required to generate electricity.
The proposed procurement strategy comes as the Government pursues a wider overhaul of the energy sector, including the transition to LNG, increased renewable energy generation, battery storage and improvements to electricity transmission and distribution networks.
Mrs Coleby-Davis said Grand Bahama had approximately 9.5 mega watts (MW) of independent power producer capacity connected to its grid, with a further 5 MW of solar capacity expected before the end of 2026. The additional capacity will bring the total to approximately 14.5 MW, while the utility has begun planning for battery energy storage procurement in 2027.
Mrs Coleby-Davis said the wider reforms are intended to strengthen the financial and operational sustainability of The Bahamas’ electricity and water services, while improving reliability and affordability for consumers.
The Government has not yet provided a quantified estimate of the savings expected from consolidated fuel procurement or a specific implementation timetable for the proposed arrangements.