Fortis provides power in challenging, delicate environment

Fortis Inc., the largest investor owned distribution utility in Canada, acquired the local energy firm in 2006. From 2007 to the end of 2010, Fortis invested approximately one hundred and ten million dollars ($110,000,000) in infrastructure projects.

 

Operating an electric utility in the Caribbean involves planning and logistics that exceed the demands faced by continental providers. There are no pipelines and railroads to transport fuel. Inclement weather can swirl out of the tropics over the summer. And when disaster strikes, armies of utility trucks from unaffected areas can’t simply drive down in convoys from neighbouring islands.

Yet the relatively small national utility operated here by Fortis Inc. – the Canadian-based energy company that provides practically all the electrical power used in the Turks and Caicos – has managed to record an Average System Availability Index of 99.98 percent. That’s the highest ASAI in the region. FortisTCI, which acquired two older local electric companies in 2006, grew again in 2012 with the acquisition of Turks and Caicos Utilities Unlimited.

FortisTCI still lacks a unified grid, but the 2012 merger allows the country and Fortis to begin thinking about a national energy strategy, said FortisTCI President and CEO Eddinton Powell. “We still have the problems of small, stand-alone, vertically integrated operations... but we are in a much better position to deploy people and assets in an optimal, integrated way.”

The company now provides 98 percent of the nation’s electricity, serving more than 12,000 customers. That power comes from diesel-fired generators with a capacity of 75 megawatts, and met a record peak demand of 34.7 megawatts last year.

One integrated system provides energy to North and Middle Caicos from the generation plant on Providenciales, and FortisTCI’s subsidiaries operate smaller generation and distribution systems on Grand Turk, Salt Cay and South Caicos.

12,000 customers are served by FTCI, AEP and TCU – about 98% of electricity consumers in the TCI

Despite the technical, environmental and financial challenges associated with energy production in the islands, Fortis Inc.’s experience in the Caribbean attracted it to the growing economy in Turks and Caicos seven years ago. “We already had investments in the Cayman Islands and Belize, so it was a natural progression,” said Fortis Inc. President and CEO H. Stanley Marshall. “Furthermore, we believe that the Turks and Caicos Islands has significant potential for long-term growth in the tourism sector.”

Of course, the dynamics of any rapidly growing economy present a series of chicken-and-egg dilemmas. How do you keep pace with the energy demands of a population that grew 37 percent over the past decade, with booming growth projected into the future? Fortis’ corporate infrastructure in Canada and management history offers benefits to local businesses that might otherwise struggle to grow their own local energy sector.

Fortis invested $20 million in two Wartsila generator engines,in 2010-11.

2012 TCIG Development Strategy

“The utility business is a long-term business,” Marshall said, citing significant investments in personnel and technology aimed at transforming the company into a modern utility. Fortis put $110 million into infrastructure between 2007-10, and spent $20 million on two Wartsila 20V32 generator engines, in 2010-11.

Not only do those high-efficiency diesel engines significantly reduce fuel costs, they also reduce emissions while shrinking the islands’ carbon footprint.

The system is the smallest in the Fortis portfolio, which exceeds 2 million customers globally, but while the company’s other Caribbean systems are comparable in size, the TCI utility is far more geographically dispersed. Those associated costs, along with the system’s reliance on imported diesel, put upward pressure on prices. Wind and solar energy production remain intriguing options, but “diesel fuel will remain the primary energy source for utility-scale electricity generation in the Turks and Caicos Islands for some time yet,” Powell said. “There is no doubt that as technology improves and prices decline, wind and solar will play a role in our energy mix. But, we are not there yet. Furthermore, we fundamentally believe that renewable energy should not cost our customers more, or result in reduced reliability.”

Powell believes improvements in the transportation and storage of Liquified Natural Gas could make it a “bridge to the energy future of more renewables,” but for now the company is devoting itself to streamlining its diesel supply chain.

“Our primary focus is on generating and delivering electricity in the most efficient way, including reducing fuel consumption,” Powell said. “We also continue to focus on improving and providing service options to our customers through information technologies, smart metering, developing a smart grid, and demand-side management.”

Image: Fortis TCI.