Still not convinced by Algonquin
More than five months have passed since the announcement of a potential sale of Ascendant to Algonquin Power & Utilities Company.
Since that time there has been no effort by the potential Canadian buyer to clearly state what benefits it may offer to the Bermudian ratepayers, the public or the future role it may play in the development of a distribution system in conjunction with the island’s developing local renewable sector.
We estimate that 44 to 50 local Bermuda jobs exist in the solar installation and maintenance business. These small businesses have installed about one megawatt of generation capacity in the past year, with the ability to develop exponentially more jobs as a result of the Regulatory Authority’s long-term commitment to have 75 per cent renewables in place by 2035 to satisfy our total electric power needs.
The combination of non-transparent events in the thinly traded stock of Ascendant, which lifted the acquisition price by Algonquin to a substantial premium, can lead only to higher prices for Bermuda’s ratepayers.
In addition, our research indicates that Algonquin as the potential foreign buyer:
• Has no experience with renewable-energy technology in a small-island, hurricane-prone jurisdiction
• Owns mostly hydroelectric and natural gas production facilities, both not applicable to Bermuda
• Owns solar installations in large landmass areas, and/or mostly uses solar technology that cannot be applied to Bermuda cost-effectively
Algonquin may present itself as a renewable-energy company, but does not appear to offer Bermuda the renewable resources it needs to develop that are unique to this small-island country.
The recent discussions with home affairs minister Walter Roban, during which interest was expressed by Legal & General Re of Bermuda to explore local investment in renewables, opens a door that could both boost our local solar labour force and finance the renewables Bermuda needs at cost-effective prices without the control of Ascendant changing hands to a foreign-owned company. The parent company of Legal & General Re is a socially responsible British-based insurer that has made more than $1 billion of investments in renewable energy and its technology. This development may increase the interest of others to invest in Bermuda’s renewable-energy future.
In addition, the RA recently improved the economics for solar panel owners by approving a significant increase in the return that Belco must pay solar-energy providers for kilowatt hours purchased from them from 17.36 cents to 22.65 cents per kWh. The increase more accurately shares the marginal saving Belco receives by not having to purchase fossil fuel to produce the equivalent amount of power.
The new generators Belco has can satisfy the island’s power-generation needs for the transitional years while phasing out the use of fossil fuels. Bermuda has the opportunity to implement its renewables Integrated Resource Plan in response to climate change and become self-sufficient and freed of foreign control of a resource fundamental to its future economic survival.
• Sir John Swan, a businessman, was the Premier of Bermuda between 1982 and 1995, and a former Belco board member. Michael Murphy, a former attorney for American International Group, was the chairman of the Association of Bermuda Insurers and Reinsurers between 1985 and 2005
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