Shell Bahamas approved as independent power producer

The Utilities Regulation and Competition Authority (URCA) has approved Shell Bahamas Power Company Incorporated as an independent power producer (IPP) in The Bahamas.

According to URCA’s register of licensees, Shell’s license commencement date began October 5 and expires on the same date in 2035.

Shell’s acquisition of the IPP from URCA is an important part of the negotiations between Bahamas Power and Light (BPL) and Shell, and means that “progress is being made on multiple fronts”, according to BPL Chairman Dr. Donovan Moxey.

“It’s good that that’s finally come through, considering all of the circumstances with COVID-19 and all of the delays with our agencies being able to take care of things.” 

Moxey, however, could only say of the ongoing negotiations between the two entities that progress is being made, without being able to give a timeline on when those negotiations would conclude.

“The thing we have always said and continue to say is we’re in the process of negotiating a long-term contract for the Bahamian people, so we want to make sure that we’re doing everything we can to get the best possible deal for the Bahamian people,” said Moxey.

“We’re still negotiating with Shell because our whole responsibility here as BPL is ensuring we get the best possible deal. Once we sign off on this, we will have to live with this deal for the next 20 to 25 years.” 

Moxey said BPL supported Shell’s IPP application to URCA when it was made on May 1.

The URCA license is key for Shell to become an operator for base power generation in New Providence, which it will be at the positive conclusion of negotiations.

Shell noted in a statement after making the application to URCA that the move was a “milestone that reflects reaching a joint understanding with BPL and the government of how this new liquefied natural gas (LNG) power plant can best bring economic and environmental benefits to The Bahamas”.

“This is the first time a company has submitted an application for an IPP license for baseload power generation in The Bahamas,” Shell stated.

Shell’s General Manager of Market Development Markus Hector said in May that the IPP application was another “key step towards solidifying the Shell-BPL partnership”.

At the conclusion of the deal, Shell will provide baseload power for New Providence as well as operate a liquefied natural gas plant at Clifton Pier.

“Now that we have submitted our application, we look forward to working further with the government on the heads of agreement with an eye on finalizing this and other agreements,” Hector said in May.

Moxey told Guardian Business recently that BPL still hopes to place its $600 million rate reduction bond before the end of the year, but continues to watch the markets which have been made volatile by the global COVID-19 pandemic.

Some of the plans for expansion BPL hoped would be in place before Shell’s entry hinges on the use of the money from that bond.

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source https://thenassauguardian.com/shell-bahamas-approved-as-independent-power-producer/