Mr. Speaker,

Over the past several months the world has experienced an extraordinary spike in the cost of fuel, with crude oil, the base product for fuel, rising from $60 per barrel in 2006 to some $140 plus earlier this year. This has resulted in an increase in the cost of fuel to BEC from $ 20 million in August, 2006 to $41 million in August, 2008.

This unprecedented and uncontrollably high cost of fuel over the past few months has significantly contributed to unusually large increases in electricity bills of consumers of electricity supplied by The Bahamas Electricity Corporation (‘BEC’). Residential consumers have experienced an increase in the fuel surcharge on their electricity bills from less than 11 cents in August, 2006 to almost 25 cents in August, 2008.

Many consumers have been unable to pay these extraordinarily high bills in full have had their electricity disconnected by BEC.

The Government has been advised that over 5,000 residential consumers have had their supply of electricity disconnected, the vast majority of these being in respect of outstanding bills of less than $1,000.00

This is not acceptable.

Such a state of affairs demands a response from a caring government; a response that will bring relief to more than five thousand families and help them through a difficult economic situation; a response that will allow more time for the implementation of medium and long-term strategies that are being devised to improve energy conservation and eventually to bring about sustained reductions in the cost of electricity, particularly through the development of alternative sources of renewable energy.

Mr. Speaker, as a result of this extraordinary state of affairs the Government will take the following steps which it expects will bring immediate relief to many residential consumers of BEC:

1. Direct BEC today to immediately restore, without any reconnection fee, the electricity supply to all residential consumers who have had their electricity supply disconnected for failing to pay their electricity bills in full;
2. Direct BEC to permit residential consumers to enter into agreements with BEC by October 10th, 2008 to pay BEC 25% of all outstanding bills and agree to pay the balance of the arrears over a 2 year period. Residential consumers will be required to keep current the payments on all future bills;
3. Enable non-contributory old age pensioners who are unable to pay electricity arrears under these terms set to go to the Department of Social Services to be assessed for appropriate assistance;
4. Permit unemployed heads of households with children to go to the Department of Social Services in order that their circumstances may be investigated and a determination made as to what assistance may be given to them;
5. Government will direct BEC to limit until 31st December, 2008 the surcharge on electricity billings to a maximum of 15 cents per kilowatt hour. The surcharge on electricity billings for residential consumers that utilize 800 kilowatts of electricity or less per month;
6. The Government will lend to BEC from the Government’s sundry capital allocation account the sum of $4 million to be repaid by BEC within the next 2 years as a means of supporting the funding of this massive social relief to consumers;
7. The Government will direct BEC to apply the Government’s $600,000.00 annual dividends ordinarily payable by BEC to the government towards ameliorating or lessening any potential future increases in the electricity surcharge as a consequence of any future shocks in the cost of oil over the next two years;
8. BEC is being directed to reverse BEC’s policy which requires residential consumers to pay all arrears in full before any disconnected electricity supply is restored and return to the policy that required only a 50% payment of arrears prior to reconnection of supply.

In addition to these steps which the Government believes will bring relief to more than 5000 families, the Government is determined to bring focused efforts to eliminating inefficiencies and weaknesses at BEC. The Government will retain an independent firm to conduct an operational audit of BEC and make recommendations to bring increased efficiencies to BEC. These recommendations will be evaluated and acted upon where appropriate as a matter of urgency.

The Government is satisfied that it is imperative that all consumers of electricity immediately adopt measures which reduce their consumption of energy, such as using energy efficient light bulbs, tankless or solar water heating systems, as well as other energy conserving practices. Such measures will lower electricity bills. The Minister of the Environment who has responsibility for BEC will immediately commence an intense awareness campaign using all available media including in particular ZNS radio and TV, to encourage and to teach consumers to conserve electricity.

Government Departments and Corporations will be directed to take the lead in this exercise by taking positive steps to reduce their consumption of electricity by replacing incandescent light bulbs, turning off electrical appliances when not in use and turning lights off at the end of the work day. Government offices will be encouraged to maintain central air-conditioning temperatures at not less than 75º Fahrenheit and to ensure that windows and doors of air-conditioned offices are properly closed.

The Government will meet expeditiously with representatives of the Grand Bahama Power Company within the next week to explore means by which similar relief might can be brought to consumers of electricity in Grand Bahama.

This exercise is intended to be a singular event designed to bring immediate relief to residential consumers experiencing hardship due to these extraordinarily high electricity bills.

The Government is committed to taking responsible steps to lower the cost of electricity service to the public so as to avoid the suffering caused by the disconnection of their electricity supply. Over the weeks and months ahead, we will continue to work toward ensuring a long term solution to this problem.