The Utilities Regulation and Competition Authority (URCA) has published the findings of its ex-post review of Bahamas Power and Light’s (BPL) Fuel Tariff Glide Path (ES 21/2026), which was implemented between October 2022 and March 2024 in response to unprecedented global fuel price increases.

The review sought to determine two key issues: whether BPL operated efficiently during the glide path period and whether customers were charged appropriately for fuel costs.

URCA found that while BPL’s glide path responded to genuine fuel cost pressures and reflected operational realities necessary to maintain reliable electricity service, at no point during the review period did the fuel adjustment charges billed to customers fully reflect BPL’s actual fuel costs. As a result, despite the phased increases under the glide path, BPL had accumulated an under-recovered fuel balance of approximately $37.6 million by the end of the program.

The review also found that operational and reliability constraints meant BPL was not always able to dispatch its most fuel-efficient generating units, particularly during periods of peak electricity demand. However, the independent assessment concluded that these operational decisions represented a necessary compromise to maintain a reliable electricity supply. In addition, the fuel hedging program introduced in 2020 produced a net benefit for customers over the review period.

The assessment further determined that the glide path’s tiered fuel charge structure shifted a greater share of fuel costs onto commercial customers, resulting in commercial customers effectively subsidising residential customers.

URCA also found that the timing of the increases, coinciding with the higher electricity consumption typically experienced during the summer months, amplified the financial impact on consumers and contributed to widespread complaints about high electricity bills.

The findings will inform BPL’s first statutory tariff review under the Electricity Act, 2024, with new tariffs scheduled to take effect in 2027. In the interim, URCA intends to develop new fuel charge regulations addressing the calculation and recovery of fuel costs, the timing and method of cost pass-through, the use of fuel charge revenues, and incentives to promote the efficient procurement and use of fuel.

The full statement can be found here: ES 21/2026 – BPL Fuel Tarriff Review Statement – The Utilities Regulation and Competition Authority (URCA)