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Power company’s sales decline despite cost drop

Grand Bahama Power Company still anticipating income growth
Guardian Business Editor

Published: Oct 02, 2013

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Despite having reduced energy costs to consumers by seven percent in just over a year, the Grand Bahamas Power Company has experienced a decline in sales to small commercial and residential customers which led to below expected performance over the last quarter, its president has confirmed.

Sarah McDonald said that notwithstanding this outcome she still anticipates that with “moderate growth and increased efficiencies” the power company can remain on track to reach earlier projected targets of $12 million in net income by 2015. By this time, the company will have completed it’s “three year turnaround” plan, allowing it to take on additions to its customer base without significant increases in expenditures.

GBPC’s last publicly released statements showed net operating income of $7.3 million and a net loss of -$17.15 million.

McDonald’s comments come as IDC utilities, the publicly-listed holding company whose sole assets is GBPC, with the remainder held by Emera, reported positive earnings of $574,000 for the quarter ending March 31, 2013 - half of GBPC’s first quarter profits of $1.14 million. ICD Utilities’ assets climbed by $851,000, or 2.06 percent, to $42.23 million, reflecting the $862,000 increase in the value of ICD’s holdings in GBPC. McDonald is also President of ICD Utilities.

While McDonald suggested that the profitability levels were below expectations, they do represent an improvement in results.

Consequently, ICD Utilities should begin paying dividends for the first time since early 2010 by the end of this year.

McDonald said that GBPC is “on target” to meet the goals it set out in its three year turnaround plan for the company after Emera took ownership of it in 2011, including improving the reliability of service and stabilizing rates for customers.

“Due to significant investments in our transmission and distribution assets and a focus on the protection programs, we have seen dramatic improvement in the reliability of our system, especially during inclement weather. With the improved efficiency of the West Sunrise Plant, we have seen a decline in the fuel portion of the bills that customers pay and a stabilization of our all-in-rates.”

The President said that notwithstanding these improvements, energy costs have remained a key concern for Grand Bahama power consumers.

“Energy costs remain a concern for our customers, as they are for people around the world, and we have been working diligently on several fronts to address those concerns.”

The executive said the power company has been exploring ways to integrate alternative and renewable fuel into its energy mix.

“In the longer term we need to find ways to decrease Grand Bahama’s dependency on fossil fuels.  To that end we have conducted a comprehensive study of alternative and renewable energy options to determine the best business case for our customers. We believe this means looking at the possibility of bringing CNG to Grand Bahama over the longer term. We remain focused on making the right and sustainable business decisions for the benefit of Grand Bahama and our customers,” said McDonald.

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