Though small by industry standards, the Bahamas Electricity Corporation (BEC) recorded a profit in 2010, the first time in many years, according to the corporation’s report.
The BEC 2010 report was tabled in the House of Assembly on Wednesday and noted that the corporation made incremental, yet marked improvements, during the fiscal year October 2009 to September 2010.
The report said after five years of decreasing net results, BEC realised a small profit of $201,000 in 2010, compared to $26,424 in 2009.
“For the first time in many years the corporation turned a profit,” the report read. “Though rather small by industry and comparative standards, it proved that the years of financial hardships for BEC would be ending at the same time that the entire country and the world would be turning the corner on what can only be categorised as the worst depression since the 1930s.”
Former BEC Executive Chairman Michael Moss said in the 2010 report that one of his primary objectives was to start the corporation on the road to regaining a strong financial footing and improving BEC’s operations in New Providence and the Family Islands.
“At the end of the fiscal year, though challenged throughout, BEC continues to move progressively out of the red and closer to a return to profitability,” the report added.
“Still deep in the recession, the beginning of the fiscal year was, for BEC as it was for the entire country a trying time. The struggle to pay for even the most basic necessities like electricity saw the corporation’s revenue intake continue to slump. Our financial challenges did not, however, start with the global financial crisis but were only made worse.”
The report added that for the entire organisation, the emphasis of 2009 to the 2010 fiscal year was about righting the wrongs and making small, though measurable steps, toward improving BEC’s financial footing.
“The decrease in the basic electricity tariff in 2004 was the beginning of BEC’s financial woes as the cost to generate and distribute electricity exceeded the price charged BEC’s customers,” the 2012 financial report added. “BEC was in fact operating at a loss.”
Recognising this, that this was the fundamental cause of BEC’s challenges, BEC petitioned the government and was granted a five per cent increase in the basic tariff.
“This made for considerable improvement to BEC’s revenue potential which was hard hit by an ill-advised rate decrease six years earlier,” the BEC report said. “It should be noted, however, that the effects of the tariff increase were not immediate.
“BEC was deep in the red. A concerted effort from the entire team was needed. Cutbacks continued, hiring was frozen and cost saving mechanisms put in place to control expenditure.”
In 2010, BEC customer count increased to 102,444 from 100,996 in 2009.
This increase, coupled with continued poor paying habits of customers resulted in an increase in gross receivables from the private sector of 29 per cent.
During that fiscal year, more than 60 per cent of BEC customers had arrears more than 90 days overdue.