Friday, 16 October 2015

Ghana's PURC Must Study The Bahamian Government's Deal With PowerSecure International To Manage The Bahamas Electricity Corporation

The Bahamian equivalent of Ghana's Electricity Company of Ghana Limited (ECG),  the Bahamas Electricity Corporation (BEC), is going to be managed for the next 5 years - once all the details are worked out after legislation for a new entity to replace the BEC is passed - by the US company, PowerSecure International, which is headquartered in the American state of North Carolina.

According to the online Bahamian newspaper, Tribune242.com, the main objective of putting the management of the BEC into the hands of PowerSecure International, is to bring relief to electricity consumers in the Bahamas, in the the form of lower tariffs - by making it a better-resourced and better managed entity.

Incidentally, the BEC is both a power generator and distributor, it ought to be pointed out.

The question Ghanaians should be asking is: why does the Public Utilities Regulatory Commission (PURC) of Ghana, not approach the Bahamian authorities, for a copy of the deal between PowerSecure International and the Bahamian government?

Surely, by closely studying it, the PURC could recommend some of the measures outlined in that document - to ensure that the PowerSecure International BEC management contract results in lower tariffs for electricity consumers in the Bahamas - to those in Ghana seeking to transfer the management of the ECG into private hands?

Apparently - according to Tribune242.com - the PowerSecure plan for restructuring the BEC, calls for a substantial reduction in the cost of electricity to consumers. And it targets a minimum price in the $0.20 cents per kilowatt hour range - which it says  would represent a 30-50 per cent reduction on the BEC's current average tariff.

The successor-company to the old BEC will also be owned 100%  by the Bahamian government.

An aspect of the deal that should be of particular interest to the Ghanaian authorities, is the idea of using Rate Reduction Bonds, proposed by some  US banks, to refinance the BEC's legacy liabilities without a government guarantee, and to provide working capital and fund other needs of the successor company to the pre-PowerSecure BEC.

All things being equal, were the government of Ghana to go for a similar win-win agreement - such as the one between the government of the Bahamas and PowerSecure - when transfering the management of the ECG (and other state-owned power sector entities) into private hands, surely, protecting the interests of electricity consumers in any such agreement would ultimately result in lower tariffs, here in Ghana, too?

It is time the welfare of Ghanaian consumers, not egregiuos profiteering by private companies at public expense, was made the sole objective of transferring state-owned entities into private hands.

Surely, by any logic, lower electricity tariffs ought to be the  end result, which the supposed efficiencies to be derived from better and more effective management of the ECG, under a private-sector entity, should produce for society's benefit?

Simply put,  in the matter of transfering  state-owned power generating and distribution companies to private-sector entitties, to manage, what is good for the Bahamian electricity consumer, is equally good for the Ghanaian electricity consumer, too.

That is why in addition to listening to the views of electricity consumers across the nation, on tariff increases, the PURC ought to study the details of the deal between the Bahamian government and PowerSecure International, to restructure and manage the BEC for the next 5 years, and bring down the cost of electricity for consumers in the Bahamas - and recommend a similar deal for transferring the management of Ghana's state-owned power sector entities into private hands: to enable  electricity consumers in Ghana to enjoy lower tariffs too.















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