by Larry Smith
A five-year management contract, worth at least $10 million, for the Bahamian state-owned electric utility was announced by the government in early February.
The bankrupt Bahamas Electricity Corporation has been stripped of some $100 million in legacy debt and a new company called Bahamas Power & Light has been set up as a wholly owned subsidiary of BEC.
Recently passed energy reform legislation calls for the issuance of a government-backed bond, which will be used to refinance BEC's existing debt, as well as to fund infrastructure and efficiency investments for BPL
The contract was awarded to a North Carolina company called Power Secure, which provides energy technologies and services to utilities in the United States. The company reported revenues of $257 million in 2014, and says it is a pioneer in distributed generation power systems with smart grid capabilities.
The agreement calls for a $2 million per annum management fee, plus the ability to earn a 150 per cent bonus - an additional $3 million per year - should the company meet certain benchmarks.
The benchmarks are presumably contained in a business plan that was presented to the government (at a cost of $9800,000) but which has not been made public. Neither has the management agreement been made public.
BPL is managed by a new public board headed by RBC Bahamas country manager Nat Beneby. The board has replaced longtime BEC general manager Kevin Basden with Jeff Wallace, who has more than 35 years of utility experience in the US.
Most recently he was vice president of fuel procurement for Southern Company, where he managed a $7 billion budget.
At a press conference recently, Power Secure executives said there would be a reorganisation of staff that might include some voluntary reductions.