FTC finds BL&P failed to provide adequate service, orders compensation

More than 600 Barbados Light & Power (BL&P) customers are likely to be compensated for losses from last year’s blackouts, as the Fair Trading Commission (FTC) ruled on Wednesday that the electric utility failed in its duty to provide adequate service.

A year and a month after its approximately 130,000 customers were affected by two days of nationwide outages, the FTC said based on its investigations it would pursue “enforcement action” against BL&P.

In the meantime, the utility will have to compensate over 600 customers who submitted a claim, once those claims are verified, the regulator said.

“A determination will be made as to what form that enforcement action will take and the BL&P will be given an opportunity to be heard. The public will be informed of the final determination,” the FTC said in its summary of a 27-page Final Findings Report.

In an almost immediate response from the BL&P, following a request from Barbados TODAY, it again apologized for the blackout, saying the November 18 and 19 outages last year were “highly unusual and involved a complex set of circumstances, some that were simply beyond the reasonable control of Light & Power”.

The 109-year-old electricity supplier said: “While we are disappointed with the FTC’s conclusions, we respect their role and our long-standing working relationship. We are committed to ensuring that our customers understand what our team has done to address these events,” said BL&P said in a short statement.

“We are resolved to set the record straight and we will work with the FTC to bring these matters to an appropriate conclusion for the regulator and in the interest of our customers.”

The BL&P said it was currently reviewing the FTC’s summary report, adding that it has been fully cooperative with the FTC throughout the review.

Giving a rundown of the sequence of investigations following the outages, the FTC said its inquiry was completed last month.

“The Commission submitted its Findings Report to the BL&P on November 18, 2020 and the utility was given fourteen calendar days to respond. The BL&P’s December 4 response was given due consideration,” it said.

The FTC spelled out its grounds for determining that the electric company was in breach of the Utilities Regulation Act of  2001 (URA), whose section 20 governs the utility’s duty to “ensure the provision of service to the public that is safe, adequate, efficient and reasonable”.

The regulator identified inadequate plant maintenance by the BL&P to be the main contributor to the two-day outages.

This, it said, affected the BL&P’s capacity to meet customers’ electricity demand in a timely fashion, adding that the matter of maintenance inefficiencies also extends to fuel quality verification, with fuel analysis reports indicating the presence of “foreign substances”.

“The fuel was therefore not compliant with the international fuel quality standard, ISO 8217,” the FTC added.

In handing down its decision, the FTC said: “The Commission has therefore found the BL&P to be in breach of Section 20 of the URA by reason of the following – BL&P had insufficient operating reserves to sustain adequate energy supply to customers on a consistent basis, there was inadequate testing of switchgear and protection systems, there was inadequate monitoring and surveillance of electrical equipment, and fuel quality was not verified on a consistent basis”.

It was on November 18, 2019, that many Barbadians woke up to an island-wide blackout just before 7:30 a.m.

The BL&P later said initial investigations revealed that contaminated fuel, compounded by ageing generators – half of which were past their retirement age – were to blame for the outage.

Power was restored to about half the nation by 3 p.m. that day although the restoration began just over an hour after the power outage began. Full restoration came around 11:10 p.m.

But then, the next day, the utility company reported that one of its large diesel engines shut down due to a stuck fuel pump overnight leaving customers again without electricity for several hours.

According to the FTC, Section 20 of the Utilities Regulation Act states that service providers must maintain and repair their property and equipment as part of its duty to provide adequate service.

In addition to the remedial action that BL&P has undertaken since the outages, the FTC is expected to issue its own recommendations in order for the areas identified to be appropriately addressed.

The FTC said three breaches of the Standards of Service also occurred, as the BL&P failed to meet the requirements of Guaranteed Standards of Service (GES 2) Fault Repair-Distribution System and GES 3 Voltage Complaint.

The regulator explained: “GES 2 requires the utility to restore service within eight hours after a fault on the system has impacted multiple customers. Restoration of service following the outages took in excess of 13 hours to complete in both instances. In addition, damage to customers’ equipment occurred during the outages.

“GES 3 stipulates that the BL&P must investigate the reported incident within twenty-four hours of receipt of the complaint; provide an assessment of the report within five working days of receipt; and resolve the issue within thirty days of the report. Furthermore, compensation is required from the BL&P where breaches occur under both of these Standards. In accordance with the Standards of Service Decision, the BL&P is required to compensate the 600-plus customers who have submitted claims, once it is confirmed that the claims are related to these outages.”

The FTC said it will monitor the assessment of customer claims and issuance of compensation.

It added: “The Commission has worked assiduously, not only for the completion of the investigation and issuance of the Findings Report, but to ensure that appropriate measures are taken by the BL&P to remedy the deficiencies which led to these national outages.”

According to the Final Findings Report, the outage on November 18 last year resulted from the failure of a high voltage switch at the BL&P’s Spring Garden 69,000-volt Substation.

“This event disconnected transmission service provided by the two lines from this station and the Central Substation. Moisture deteriorated switch (SP7S2) insulation while it was not in use, thereby resulting in the fault event,” the report said.

It pointed out that on the second day of outage, at about 6:22 a.m., “a low voltage direct current (DC) alarm occurred on GT01 while it was carrying 12 MW”.

The report added: “The unit subsequently tripped offline at 6:59 hrs owing to the said alarm, which was being investigated prior to the trip. Investigation of the alarm by the BL&P revealed that the lubrication pump and fuel pump for the unit were operational from the previous day’s outage and, as a result, the DC supply became depleted. The trip event led to an island-wide power outage and as a result, the total unserved energy was estimated at 501,121 kilowatt-hours [over a 24-hour period]”.
(marlonmadden@barbadostoday.bb)