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The Emera Connection

Nova Scotia and Grand Bahama Share Similarity in Private Power Monopoly.

by Miles Howe

Troy Garvey Interviews Local NSPI Customer. Photo: Miles Howe
Troy Garvey Interviews Local NSPI Customer. Photo: Miles Howe

Two weeks ago, two gentlemen from the Bahamas came to Halifax, looking for answers from Emera. Troy Garvey and Jonathan Glinton represent Operation Justice Bahamas, and they have their sights set on taking the home-grown power monster to court back on the island. Set sail for corporate misadventures as we embark upon...The Emera Connection.

One of Emera's most recent procurements is the Grand Bahamas Power Company, of which they maintain an 80% ownership, as of December 2010. The regulatory situation in Grand Bahama is unique, and lends itself well to corporate pirates that make Captain Morgan look more like Captain Kangaroo. However, to fully understand the sneaky details behind Emera's current plum deal, we'll need to take a step back in history. 

In 1955, Virginian lumber man Wallace Groves, an original Wall Street bankster from the '20s, signed an agreement with the Government of Bahamas, known as the Hawksbill Creek Agreement (HCA). Originally intended to allow Groves access to timber on the north end of the island of Grand Bahama, HCA turned a 200km stretch of pristine Caribbean real estate into a “free-trade zone”. Groves logged, but he also built an industrial, free-trade, empire, established Freeport, the second-largest in the Bahamas, and created The Grand Bahamas Port Authority (GBPA).

Groves passed away in 1988, but the veritable kingdom he established in Grand Bahama lives on to this day through the GBPA. The GBPA continues to hold licencing responsibilities for industrial and commercial enterprises. It develops all manner of infrastructure, and runs the airport, the casinos, and tourist development projects. With a finger in every pie, the Port Authority is the corporation that governs outright; a frightening beast indeed. In the early 1990s, they sold interests in Grand Bahamas Power Company, which Emera acquired a controlling interest in, in 2010.

The nuts and bolts of the Grand Bahamas Power Company is that it has a generating capacity of 137.5 MW, and serves approximately 20,000 customers. The vast majority of the Power Company's generators run on low-grade oil, known as “bunker C”. For comparison's sake, the Lingan Power Plant in Cape Breton, Emera's “Old Nelly”, has a generating capacity of 600 MW.

The Power Company outfit isn't new, and brownouts and power outages on Grand Bahama weren't unknown before Emera went south. But according to Obie Wilchcombe, MP for West End and Bimini, power outages on Grand Bahama have never been this constant or lengthy.

Outages aside, the real zinger being thrown at Emera by Operation Justice Bahamas is related to the meteoric, and seemingly unaccountable, rise in power bills. Garvey, Glinton, and the pro-bono lawyer taking the case before Bahamian parliament, Osman Johnson, claim that bills have begun to rival mortgages. Dozens, if not hundreds, are now doing without power on Grand Bahama.

“Emera has come here, and it's actually like the Wild West out here.” says Johnson. “They are literally charging whatever they wish. We don't have any alternative, we are totally vulnerable to the company and their total lack of corporate social responsibility. They're fully aware of the fact that hundreds of homes on the island where we live are without power for months on end. You go to some areas where 3 or 4 houses out of 10 have no power. And you've got little babies of a few months old, whose mothers are telling me, “I can't feed my kids properly because I can't cook any food.””

Emera refutes the charges, claims that the allegations are overblown, and argues that the rise in power bills is directly related to the price of the oil they purchase. The price of oil is passed on to consumers in the form of a “fuel surcharge” on the power bill. This charge, which is about 24 cents per kilowatt hour, makes up about 2/3 of a typical bill. But Johnson doesn't believe this argument for a second.

“Emera has consistently stated that the fuel surcharge which they levy against customers in addition to usage is based upon the price of oil internationally.” says Johnson. “We have figures from 2008, which show that when the cost of oil was $145 a barrel, the surcharge was 14 cents (per kw). Today the cost of oil is under $90 a barrel, and they are charging nearly 24 cents (per kw) in surcharge. So a 2 year old could look at those figures and realize that there's a serious discrepancy.”

Troy Garvey agrees.

“Nobody has been able to explain it to us, even the CEO of Grand Bahama Power Company, Sarah MacDonald, who is representing Emera.” says Garvey. “They have yet to show us what the formula is for how they charge us this outrageous fuel surcharge. They say they go by how much they purchase it for, but during the summertime, oil (prices) were going down, while their fuel surcharge was going up. So we’re trying to understand where the math is in that? They just sit around the table, and I guess they pick communities, and say “How much are you going to charge this area for this month?”, and then they divide that by the number of houses in that area. That’s the only thing we can say as consumers.”

Which brings us to the question of how the bills are calculated, exactly. Much has been made of the Power Company's meter monitoring practices. Indeed, with allegations circulating that the Power Company had been over-billing larger clients to the tune of $5.5 million, the GBPA conducted an audit of the Power Company. The Port Authority's audit turned up only 5 cases of over-billing, but Johnson feels this is a case of the fox watching the chicken coop.

“We are absolutely certain that they are engaging in woefully discriminatory pricing practices, that they have illegal and fraudulent billing practices in place, whereby they grossly overcharge their customers without any type of tabulation as to where these bills have come from.” says Johnson. “The regulator, the so-called regulator, owns shares in the power company. So I don't know how much of a regulator he can be. So do local politicians, who are supposed to be the ones providing legislation and regulation of this sector. So what we have really, is Emera engaging in a free-for-all in Grand Bahama.”

The free-for-all certainly seems to be paying off financially for Emera. The company made $10.7 million off its Caribbean acquisitions last quarter (which also includes Barbados Light and Power Company, the earnings of which it murkily lumps together into one sum), as compared to $2.8 million in the same quarter last year. Emera CEO Chris Huskilson, who brought home a salary of over $3 million last year, appears to be at least vaguely aware of the problems on Grand Bahama, in that he mentioned during a conference call to stakeholders that they “can't be fixed overnight.”

Whether or not Huskilson ever ponders the notion that Emera itself might be the problem isn't known.

In any case, let it never be said that Emera doesn't know a good monopoly when they've got it. Rumours are now circulating around Grand Bahama that they are considering purchasing the GBPA, the licencing and monitoring monopoly. With the Port Authority in their pocket, there would literally be no one to answer to. Johnson notes that Emera is also looking to buy Bahamas Electrical Company (BEC), the country's as-yet nationalized energy provider.

“That is why we have a bit of a quandary here, because the current administration...they are trying to present this to the people as “Oh, we care about your concerns, we've talked to the company, and we're going to wait to hear what they're saying.” When in actual fact, it is this government that is currently negotiating with Emera to purchase BEC, and they are trying desperately to push it through before the next election, without any votes, without any referendum, and despite the fact that it is our government-owned national energy provider.”

These are all very serious allegations on the part of Johnson and Operation Justice Bahamas. But Johnson has drafted a formal complaint, which is supported by about 5,000 signatures on a petition, which is all supported by individual statements from affected customers, outlining their grievances.

On November 14th Johnson plans to bring the formal complaint to the Bahamian Prime Minister's office and the Bahamian Consumer Protection Commission. The Consumer Protection Commission is obliged to by law to conduct an investigation once the complaint is made, and Johnson is confident that he will be soon using the findings of the investigation as evidence to support a lawsuit against Emera.

The impending battle against Emera has garnered the support of opposition MPs, including MP Obie Wilchcombe.

“The difficulty that I think we face, if you understand the history of Freeport and Grand Bahama, is that it allows companies to operate in the Freeport area without regulations and without regulatory agencies.” says Wilchcombe. “The Port Authority, which are the owners of the Freeport area, for the most part are the regulators. But their regulations are not in stride with the regulations with, say, the Bahamas Electricity Corporation, which have been held in place by the government. So we've always had difficulties there. If Bahamians have been over-billed, and we believe it to be so, and if it can be proved, we're hoping that the corporate citizenship of the company would allow it to think about the behaviour and provide some free months of power, and in some cases reimburse the Bahamians. There's questions to be answered, and we need answers, but they've been very difficult to get.”

Wilchcombe continues.

“Bahamians are understanding, if you cause them to understand, and show them some respect.” he says. “The truth is many Bahamians have lost power. They've lost their electricity supply because they just cannot meet the bills. And when you cannot meet the bills you appreciate what's going on. You're not going to able to feed your family. The children can't study in the nighttime because there's no electricity for homework. It disrupts the entire family and many Bahamians have had to suffer as a result.”

As for Troy Garvey and Jonathan Glinton, their visit to Nova Scotia was met by an unseasonal cold spell. On the other hand, the warm reception they received at the provincial legislature, where they were greeted with a standing ovation, and a proposal by Liberal energy critic Andrew Younger to audit NSPI's own billing practices, may have cut through the chill in the air.

“In Halifax we got the opportunity to meet with residents, business people, rich people, and the poor. And everybody is feeling the same thing that we’re feeling back home in the Bahamas.” says Garvey. “And that’s including the staff at the power company. Emera is now taking away the benefits of the staff. What we have garnered here from Nova Scotia (is that) we have found out that Emera only has one thing to do, and that is to receive moneys on the back of the poor people. They don’t care about the people. It is inhumane. They are driving people into poverty here, and they’re driving people into poverty in the Bahamas.”

Fact-finding mission to Grand Bahama, anyone?


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Nova Scotia Power report by Daniel J Towsey

Nova Scotia Power
report
by Daniel J Towsey
www.scribd.com/danieltowsey
http://groups.yahoo.com/group/TheTruthSoldiersClubCanadian/message/160

Wednesday June 4th 2008

I am writing this for a public record of my investigation into Nova Scotia power and its April application to the Utility And Review Board for a 12% - 14% increase in power rates for Jan 1 2009.

I am writing this because I do not trust the government and I fear for my safety.

In my research I discovered that before 1992, Nova Scotia Power was a non-profit publicly owned public utility and essential service.

After this date the public was told that Nova Scotia power had accumulated a huge debt.. Which was made to appear that the Province of Nova Scotia was incapable of managing this public utility properly and that it would hand the control over to a private management company.

The government of Nova Scotia did not do what would of been expected and go out and seek a suitable and existing experienced company to manage Nova Scotia Power.

I phoned the Premiers office and asked for information as to how and why a public utility was handed over to a for profit company, I then stated my view that, Nova Scotia power belongs to the people of Nova Scotia. I indicated that I feel that the government conspired against the people of Nova Scotia. And that I feel that the public has been ripped off and that a conspiracy [crime] has taken place to defraud the people of Nova Scotia.

I also asked them, why is it that every time they grant Nova Scotia Power an increase its rates, they do not increase the rates paid to people on assistance, fixed incomes or pensions.

It’s because the 20% of the will off people in this province work for the province or a corporation that reaps benefits from the government. And as such these rich people are not affected by the rates. As they have employment contracts that have a cost of living clause built in.

Since they don’t suffer, they can not have any compassion for the poor who are seriously harmed by the higher costs of electricity.

An increase in power rates has a disproportionately high effect on the poor. A dollar is much harder to come by for the poor than it is for the rich.

So the poor 80% of this province are paying a much higher percentage of their income than the rich for electricity.

I feel that there is no more middle class. There is just the really rich and the really poor.

Eventually a parent company by the name of Emera was created. I went to their site and studied their history. This company did not exist before it acquired Nova Scotia power.

The price of electricity has been going up ever since. This company is now making over $250 million in yearly earnings.. I read on their site that they made $345 million in 2007. This company has been making so much money from Nova Scotian’s that it has been buying up assets in other energy businesses.

The infrastructure of Nova Scotia power is the same today as it was before it was handed over to Emera. Everything that is there was bought and paid for by the Nova Scotia tax payers.

I asked the premier to please give me information as to how much Emera paid for this 4 billion dollar infrastructure. As Emera had no assets when it was created.

I also indicated that any profits made from this [ NS Power] public asset should be given back to the people of the province of Nova Scotia.

I was also surprised to see that there was no provisions made for Emera to pay off the preexisting debt of Nova Scotia Power.

So now the tax payers have lost this money making public asset. Which means that the people of Nova Scotia were not able to use Nova Scotia Power’s profits to pay off the debt. So now Nova Scotian’s lose twice, they have to pay off the debt plus interest and pay higher energy prices. Further increasing the poverty in this province.

Emera also now receives another public asset. That being our offshore natural gas. To run it’s large power plant at the Halifax harbor. You would think that this would of helped to bring the costs down for Nova Scotian’s.

I remember the news reporting that Emera stated that Natural gas was going to reduce their cost of producing electricity by 40%.

So I was shocked that a few months later they applied for an increase in their rates, and that the government of Nova Scotia granted it.

The tax payers have seen absolutely no benefits from their other resource being the natural gas.

Background Information on Nova Scotia

A couple of years ago It was stated by the government in news reports that Nova Scotia’s population of less than one million was the poorest province in the country.

Halifax having the majority of this population was stated to have the highest violent crime rate in the country.

Plus now there is a food bank in every neighborhood. Over 80,000 people go to the food bank every month.

Considering how small Nova Scotia’s population is, How does Emera make so much money?

It is a proven fact that poverty breeds crime.

I feel fascism is moving in a democracy is disappearing. In the past thirty years Nova Scotia has pretty will lost all its industries, Fisheries, Train Servicing Depots, Ship building, Mining, Cape Breton Foundry, Canning, Chocolate Making, Refinery, Military bases, and tourism. I’m sure there are more. I can’t think of any manufacturing left in this province.

It’s even almost impossible to find a family doctor.

I just received a phone call at 8 pm from Bob Manuel of the Nova Scotia energy department. He said that he was familiar with my request and that they would put together a report for me.

But when I spoke with him he knew nothing. His call was strange as he did not ask me anything and I had to tell him what information I was looking for.

He never indicated that he would call me back. I found it strange that he also did not have my address or e-mail.

So I really wondered who this guy really was.

I said to him that I was looking for answers to the questions that I asked the premiers office.

I also indicated to him that I needed this information for my article I was writing and also, so that I could be better prepared for my testimony at the up coming hearing on Nova Scotia Power’s rate increase application.

*******************************************

Thank you for reading this. I hope it was informative for you. I will write some more about this in the future.

If your a Nova Scotian, please call your politicians if you are concerned about the power rates. Pssssst! Get Involved..

**********************************************************

UPDATE
I applied and was accepted to speak at the public hearing at the public utilities board and when they realized this. They canceled all public involvement and made all their decisions behind closed doors..

Links
www.scribd.com/danieltowsey

No More Free Health Care In Canada
http://en.netlog.com/danieltowsey/blog/blogid=1885999

Tobacco Chemicals Updated..How the chemicals got in the tobacco
http://my.opera.com/danieltowsey/blog/2008/01/28/tobacco-chemicals-updated

Canada’s Police State Bill C51 Camouflaged as a Health Bill
http://prod.ottawa.indymedia.org/en/2008/05/7587.shtml

Made in Canada
http://www.mychurch.org/blog/172704/Made-in-Canada

Once upon a time there was a Canada
http://venezuela.indymedia.org/es/2007/07/1797.shtml

The Last Democracy
http://www.indybay.org/newsitems/2007/12/04/18465143.php#18465144
Be sure to read my follow up article
The Last Democracy is DEAD
http://danieltowsey.wordpress.com/category/the-last-democracy-is-dead-2/

John Pilger - The Perils of Privatisation

http://www.youtube.com/watch?v=xG4w2CI0qFw

COMMENTS
Tammy Odore
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HIGH ELECTRIC BILLS

Since Emera bought over the Barbados Light and Power, electricity bills in Barbados have more than double with no reasonable explanation.

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