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Without a paddle

New CEO says company complacent, lackadaisical
  • Mike Harreld.

  • Darnell Osborne.

  • Pamela Hill.

  • A BPL team at work near Marshall Road after Hurricane Matthew last October.

CANDIA DAMES
Managing Editor
candia@nasguard.com

Published: Sep 06, 2017

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The new interim CEO of Bahamas Power and Light (BPL) Mike Harreld has met a company “that is unmotivated, complacent and lackadaisical”.

As the company scrambled to prepare for Hurricane Irma, Harreld, in writing the BPL board members on Friday, lamented the fact that nearly one year after Hurricane Matthew, critical repairs have not yet been made to the Clifton Pier Power Plant damaged in that storm.

Harreld wrote: “I share your frustration about repairs to Clifton Pier and the slowness of our insurance recovery.”

He noted that a BPL manager handling the matter had just sent the board documentation to approve the work at Clifton.

“We should have acted much quicker, more thoroughly and diligently,” wrote Harreld, who was appointed interim CEO last week, days after the board fired Pamela Hill as CEO.

“I have been working consistently with our folks, both in my new role and when I was here functioning as CFO and as a consultant, to obtain our insurance proceeds and facilitate needed repairs at the plant. I sent you a status on our insurance claim earlier this week.”

Harreld wrote that there are several reasons for the delay in repairing the plant.

“I am not sure I understand the entire picture but will take a few moments to explain what I know and ask for your help.

“Our procurement process is slow, bureaucratic, cumbersome and convoluted.

“We need to discuss what I see as the best way forward.

“Our culture needs some major changes. There is usually no sense of urgency or ownership of our issues and problems. I have ideas and thoughts that I would like to discuss with you.

“There are a few legal/insurance technical questions that need resolution.

“I want to talk with Mr. Oscar Johnson ASAP on the most efficient way to obtain legal assistance.

“Our capital and operating budgets have not been approved.

“Our employees are unsure how to proceed.

“The changes in legal, with the CEO, and the uncertainty of how to work with our new board has increased the anxiety and level of caution.

“In short, we are a company that is unmotivated, complacent and lackadaisical.

“With your help, we have the potential to be significantly better. I suggest we meet to discuss the way forward.”

Harreld appears to have been responding to a letter on Friday written to him by BPL Chairperson Darnell Osborne, who laid out the board’s concerns.

Osborne wrote that the board has been expecting to receive from management an update on the status of the insurance claim, and more specifically requested the amount of the claim, breakdown of the same and supporting evidence.

She advised that the last email in this regard was sent to Hill, the former CEO, by the executive director on August 11.

“Despite several communications in this regard, there is no information nor documentation coming as a result of the follow-up made by the board,” Osborne wrote.

“It is almost one year since the hurricane struck last year, and we note with concern management’s inability to secure the Clifton Pier site.

“During its tour, the board observed several damages as well as leaks into the building; however, I am advised that management did not pursue getting the repairs done.

“The Procurement Committee took this matter in hand and at its meeting about two weeks ago, the management was again given directives to come up with a recommendation so that the contract could be awarded.

“I see that Mr. Whitney Heastie, chairman of the Procurement Committee, has been following up on this matter and has sent several emails, but so far no purchase order has been submitted for execution.

“We are watching anxiously the movements of Hurricane Irma, which is likely to affect The Bahamas, and the board helplessly notes the lackadaisical approach to the repairs at Clifton, which is totally unacceptable.”

Osborne then issued a directive for the purchase order with the recommendation of the board to be submitted no later than last Friday afternoon.

 

 

Detrimental

The letter is disturbing in that it points to a lack of urgency in moving on critical repairs 11 months after the last hurricane.

The admission from the interim CEO that BPL is a lackadaisical and complacent company is equally disturbing, but there is some comfort in his recognition and that of the chairman about the state of affairs at the utility.

Acknowledgement of a problem is a first step in addressing the problem.

The fact that BPL has been dragging its feet on effecting the Clifton repairs should anger consumers who already had no comfort in the company’s ability to effectively prepare for and respond to another hurricane.

We all remember the nightmare that was Hurricane Matthew, and the power company’s response in the storm’s aftermath.

Hurricane Matthew met BPL woefully unprepared when it devastated parts of the central and northwest Bahamas last October.

While reasonably minded residents recognized the need for patience to allow BPL to get the power back on after the hurricane, there was a general sense that the company was out of its depth in handling that storm.

There was a catastrophic failure of the power grid in New Providence.

The much-discussed problems of maintenance and repair loomed large in the wake of that storm.

The failure to effect repairs at Clifton has serious implications for the company’s ability to provide reliable power supply, especially in the days and weeks after another hurricane.

In The Tribune on Monday, Paul Maynard, president of the Bahamas Electrical Workers Union (BEWU), warned of potential flooding at the plant, because damage from Matthew was never repaired.

Maynard said if the roof on the control room to the Clifton Pier Power Station is not repaired before Hurricane Irma, BPL would be in trouble.

He said even if repairs began immediately, they would not be done by Friday, when Irma is expected to impact New Providence.

The control room is where all of the critical wiring of the plant comes in. It is essentially the nerve center of the plant, so if it goes down, BPL’s problems will be much worse than they have been.

Clifton provides about 60 percent of the power needs to New Providence on a daily basis. It burns cheaper fuel than the Blue Hills plant.

With the plant compromised, there are grave concerns about the kind of response BPL would be able to mount, should Irma create widespread devastation to these islands.

Of course, in its public statements, BPL seeks to give the public the impression that it is prepared.

The company said in a statement yesterday: “BPL’s hurricane preparedness began earlier in the year and included tree trimming exercises and the procurement of critical parts that may be damaged in the event of a storm.

“As such, spare parts have been distributed in both New Providence and the Family Islands. Additionally, capital projects and maintenance activities during the last 12 months placed a great deal of emphasis on making certain that BPL is better prepared to withstand severe weather and to assist in faster service restoration following a storm.”

It’s too bad that BPL had a complacent attitude toward the badly needed repairs at Clifton.

It conveniently did not mention to the public that the Clifton plant remained compromised up to this past weekend.

 

 

Deficiencies

Not unlike recent boards before it, the new board of BPL faces the daunting task of addressing the critical issues at the company.

The immediate concern — the Clifton plant and preparation for the approaching storm — left officials racing over the weekend to get those repairs started.

It was clear from Osborne’s letter that the new board expects and is demanding quality performance.

The new board only recently pointed to “critical performance issues with PowerSecure”, which has a management services agreement (MSA) for BPL.

At the time, the board called on PowerSecure to “cure all deficiencies and/or breaches under the MSA within 30 days”, but did not specify what those purported breaches were.

Osborne advised, “These actions have been made in the best interest of BPL and the Bahamian people.”

While the storm is an immediate and critical concern, BPL’s problems are deep-rooted, long-standing and require funding in addition to proper management to correct.

While CEO, Hill wanted a rate increase.

But the former administration would consider no such thing, given that an election was looming.

With consumers already stretched, any action on a rate hike was out of the question.

The decision by the Cabinet to veto that price hike has left BPL unable to finance any of the aspects of investment to which Hill referred.

Rather than investing in modernizing BPL’s infrastructure, the utility was instead left to contemplate cost-cutting efficiency measures to scrap together a response to Hurricane Matthew.

When he was introduced to the media last week, Harreld indicated financing was the way forward for BPL as it seeks to raise capital and see its generation and transmission systems improved.

“A lot of our equipment is old and either needs to be refurbished or replaced,” he noted.

While the funding issue is critical for BPL, what the letter from Osborne and the email from Harreld reveal, more than anything, is a company-wide culture that has resulted in actions — or lack thereof — that could prove detrimental to the interests of consumers.

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