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Advertisers Dupuch & Turnquest & Co.
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Freeport Power Co.: Committed to attracting investment by offering first-rate service
In 1993, Southern Co. bought a 50 percent stake for $35 million in the Freeport Power Co., a joint venture between GBPA and Southern Co. The Freeport Power Co. was Southern Co.’s first international expansion. Since its investment in Freeport, it has grown its international portfolio to 30 percent of its total business.
Larry Brantley, president and chief executive officer of the Freeport Power Co., explained, “it was an opportunity to take part in what we anticipated at that time to be part of a growing economy. In 1994 when Southern Co. invested in Grand Bahama, the economy was not nearly as vibrant as it is now but the pieces were in place for it to be success. The government was very investor friendly and there was the Port Authority, a major investor and economic development partner in Grand Bahama. Their (the Port Authority’s) motivation here was to grow the economy, to create jobs, to create wealth and make this place what it ought to be,” said Brantley.
To Brantley, who had 23 years of experience at Georgia Power, coming to Grand Bahama seemed like an excellent opportunity to practice some of the skills he had learned over time and to be a part of the international effort of Southern under Southern Energy. Frankly I wanted to be a part of it,” said Brantley. “I didn’t want to wake up when I was 60 years old and say ‘I’d wish I’d done that’,” he said.
One condition that Southern Co. agreed to with the government of The Bahamas and the GBPA before purchasing its stake in The Freeport Power Co. was to connect the East End and the West End of Grand Bahama and to offer the same service to all customers. Brantley reported that this has been accomplished and that all residents have the same rates, power source and customer billing.
Because Grand Bahama Island is 96 miles long and is made predominately from limestone, aboveground lines distribute electricity. Burning oil generates the electricity, and rates average about 13.5 cents a kilowatt-hour, comparable to Long Island, NY. Rates are cheaper than they are for customers in Nassau, the capital city of The Bahamas. In fact, Freeport Power Co. offers the second lowest rates in the Caribbean to a customer base of 16,000 and is growing by 2.5 percent to three percent a year.
Freeport Power wants to attract light and medium industry loads by offering excellent service at competitive rates. Brantley noted that because competition to attract industry is global, Freeport Power must not only offer excellent service but also keep costs down when it comes to investing, buying the most efficient, cost-effective generators.
This is also good for the environment. Southern Co. is under all the same laws and obligations in the Bahamas as it is in the United States. Thus, it must monitor emissions, make sure that its oil storage tanks are securely sealed and so on. “Southern has a tradition of “doing what is right for the right reason,” said Brantley.
By the summer of 2001, Southern Co. and its partners will have invested more than $72 million in improving the plant and in equipment, with the majority of that in the new generators. An average of $5 million a year is spent on improving equipment such as new bucket trucks, all in the name of providing better service.
The plant currently has eight generators and a total capacity of 127 megawatts. At the peak of service last year, the company only used 62.5 megawatts, indicating room to grow. However, anticipating an increase in demand with all of the new investments being made on Grand Bahama, Freeport Power installed an additional 13.5-megawatt, slow-speed diesel engine in 1997 at the cost of $17 million dollars and will be adding another one in 2001 worth $19.5 million. The total upgrading of the plant and equipment will be $72 million.
Brantley noted that the biggest challenge is growing business. He explained that until Freeport Power Co. had enough customers to use more than two generators at a time, when outages occur, restoring power takes time. Unlike in the United States, or in any major city in the world, Freeport Power is not connected to a grid system. In other places, when part of the grid goes down, the company can switch to another grid. In Freeport, the company is self supporting, connecting directly to the customer. When only two generators are being used, as is the case during winter months in Grand Bahama, switching to another generator takes time. This is less of a challenge during the summer months when it runs four to five generators at a time. “In order for us to provide a better service, we need to get more mass on the system so that when we have a hiccup on one (generator) we can quickly pick up service with another one that is running.”
With the coming need to have a stable power supply to grow e-commerce, the company plans four additional 13.5-megawatt slow-speed diesel engine generators to spread the risk of generator outages more widely.
With an attitude of “what’s good for the community is good for business,” the Southern system has, for all of its 67 years, had a strong economic development role in the communities it services, Brantley said. The Southern Co. grew into this role because of how the south developed. “We have been doing that for a long time; we know and understand that role,” said Brantley.
“What I enjoy,” said Brantley, “is that the Port Authority has also been in that business also and is much further along in attracting international business than is Southern. The message is we have partners here. We are trying to marry the skills, background and contracts they have with what we know and understand about the U.S. market.”
“Our business is about growing the economy, creating jobs, creating wealth; meters follow. It’s all about the interconnectedness of the product we have and how we all prosper,” Brantley said. It is this attitude and combination of resources that is attracting investors to Grand Bahama.
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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Economic development of a country depends on its ability to offer reliable, cost-effective utilities and infrastructure. Acutely aware of this fact, the Grand Bahama Port Authority decided to look for a foreign partner to help improve the infrastructure, distribution and administration of its electric company.