BELCO Seeks Approval: Rate Increase

November 14, 2011

The Bermuda Electric Light Company Limited [BELCO] has submitted a proposal to the Energy Commission, seeking permission to increase base rate tariffs from 2012 through 2014.

Saying it is sensitive to the impact of the ongoing economic downturn on its customers, the utility has proposed that any increases are kept in line with the island’s official inflation rate.

A statement issued by the company today [Nov.14] said, “BELCO did not increase rates in 2011, although it had approval to do so, due to economic conditions on the island.

“The company is concerned about the public interest and is, therefore, proposing rates that have been benchmarked against the Consumer Price Index [CPI] to keep them close to CPI.”

In the recent past BELCO said it was largely able to avoid rate increases and finance operations and capital expansion from income growth that was achieved by sales growth and cost containment efforts. nt.

“However, stagnant electricity sales have led the company to submit the application for rate increases to ensure a strong fiscal platform that can support the debt financing costs of the capital replacement programme,” the company said. “As has been BELCO’s practice, the company will not increase rates, if income levels are appropriate to sustain its requirements.”

“BELCO has requested that the Energy Commission consider the following average rate increases:

  • Residential customers — 3.5% average rate increase per annum through 2014, including Facilities Fee increases of $3.00 in 2012 and 2013, and $2.00 in 2014.
  • Commercial demand customers – 5% average rate increase per annum through 2014.
  • Small commercial customers – 3.75% average rate increase per annum through 2014, including the same Facilities Fee increases as for residential customers.

“The average monthly usage by residential customers is 700 kilowatt hours (kWh). Under the proposed increase, a customer using 700 kWh per month would see their electricity bill rise from $280.13 in 2011 to $283.05 in 2012, a difference of $2.92. The present average price per kWh for this customer inclusive of the facilities fee and with an average fuel adjustment rate of 15 cents per kWh is 40.02 cents, as compared with the proposed price of 40.04 cents per kWh for 2012.

“The recommended rate structures have been designed to encourage customers to use energy efficiently, with higher prices for higher usage. BELCO plans to pilot a Time-of-Use rate in 2012 to encourage customers to perform certain tasks when rates are lowest, such as running pool pumps, doing laundry, etc.

“BELCO is requesting the increase because the company will need to spend some $300 million over the next 10 years to replace aging equipment that has reached the end of its operational life and to add capacity to meet customers’ needs, ensuring that BELCO’s system remains flexible and redundant. Capital expenditure is required both in the Central Plant and on the Transmission & Distribution system, which will also be upgraded to incorporate large- and small-scale renewable energy sources.

“In the past, BELCO was largely able to avoid rate increases and finance operations and capital expansion from income growth that was achieved by kWh sales growth and cost containment efforts. BELCO continues to make strides with respect to cost containment.

“However, stagnant electricity sales have led the company to submit the application for rate increases to ensure a strong fiscal platform that can support the debt financing costs of the capital replacement programme. As has been BELCO’s practice, the company will not increase rates, if income levels are appropriate to sustain its requirements.

“Capital work over the next decade is imperative, so that BELCO may continue to provide a secure, reliable, base load electric power system for Bermuda’s residents and businesses. In May 2011, BELCO received Planning permission to move forward with development of a new North Power Station within its existing Pembroke footprint. The North Power Station development will enable BELCO to retire aging equipment, replacing it with new, more efficient plant. The North Power Station is scheduled to be commissioned in 2013, when BELCO expects that new, more efficient engines will result in higher output per barrel of fuel.

“In addition to building the North Power Station, over the next three years, BELCO will undertake major Transmission & Distribution capital projects, including the addition of a new submarine cable to the East End of the Island to ensure redundancy, and replacement of the aging submarine cable that feeds the West End via Dockyard. BELCO will also replace critical, but aging transmission cables to its core Flatts Substation, and will replace aging equipment in, and increase capacities for, substations in the City of Hamilton and Prospect, which serves the National Stadium complex.

“Throughout its 105-year history, BELCO has always maintained a core infrastructure that accommodates the growth of power throughout the Island, regardless of whether it is an extension to a single-family home or a major commercial development. BELCO’s application to increase rates is necessary to ensure that the people of Bermuda continue benefiting from a secure, reliable and sustainable base load electric power system that supports the Island’s progress.”

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Comments (62)

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  1. Keep them Honest says:

    The average monthly usage by residential customers is 700 kilowatt hours (kWh). Under the proposed increase, a customer using 700 kWh per month would see their electricity bill rise from $280.13 in 2011 to $283.05 in 2012, a difference of $2.92.

    WELL, they never mention FUEL adjustment! (hidden fees)

    Add FUEL ADJUSTMENT

    283.05+ 250(approx)= 532.05

    COME ON!

  2. Bda Jayme says:

    I am a little bit confused – BELCO are claiming “stagnant electicity sales” as the need for an increase and then say they are going to “encourage customers to use energy efficiently” – all I see from this is more “stagnant electricity sales” as I will be using my energy “efficiently”.

    • Honestly says:

      True, and that’s funny again, if sales are stagnant then why do they need to build another power plant in the first place?!

      I’m getting one of those Energy Detectives to see where my power is being wasted so I’m not giving them anything extra, getting solar hot water after that.

  3. joe says:

    Any rate increase should not be allowed at this time. This is the same principle as parliamentarians taking a pay increase. Belco shareholders must take the bad with the good, as very few businesses on island are even getting a cost of living increase in their prices. The other way of looking at it would be to put a limit on profitability in the short term but holding rates would be more desirable.

  4. Responsible dog owner says:

    And how much of the “stagnant electricity sales” can be attributed to the +/- 4,000 people (ex pats & Bermudians) who have LEFT Bermuda?

    • Death to party politics says:

      Ding ding.

    • joonya says:

      ahhh…. de Pee El Pee’s poor decisions starting to have an impact on their very own voters. Go ahead keep them in. Its just gonna get a lot worse…

  5. Rukiddinme says:

    Are you kidding me? They have already recently purchased three months of fuel at whatever the cost and the fuel adjustment cost doubled if not exceed the useage cost???? Went from $250 to $650 and this is keeping the customer in mind through challenging economic times………….I am sick of island monopolies where a vendor can charge whatever they want. Belco rep said they filed the fuel increase with Government who approved it…….are any Government officials owners of BELCO shares????? Good question to ask.

    • Honestly says:

      That’s an interesting point, valid also, ever heard of the Eugene Cox Switch Station…

      I wonder how many shares went to the off-spring of Mr. Cox, I think this type of transparency is mandatory in the US.

      But hold on, isn’t the current CEO of Belco, Vince Ingham, now a Senator, hmmmm…

      I’m also curious why Vince is leaving Belco, anyone heard anything about the circumstances surrounding his departure?

      • Setting it Right says:

        The question that should be asked is how much of a GOLDEN HANDSHAKE did Vince get as he is being FORCED OUT.

  6. Chart says:

    If they are given this boost, what will happen to fuel adjustment?
    Cost of power is outta control now.

  7. Free Thinker says:

    Everyone else is taking a pay cut, why do these greedy bast–ds think they are to maintain their margins. Every corporation want’s to balance their books on the backs of the average person. I say no rate increase, they can absorb some of the hardship like everyone else. Shame on you BELCO for even thinking of this, at this point in time.

  8. Tommy Chong says:

    Its funny how monopolies in Bermuda act as if the public has a choice. This is not Toronto or New York where Niagara Falls facilities has been split up between companies to offer competitive rates but belco’s board members pretends it is. Why not work on getting more efficient ways to provide the public with electricity here faster. I’m sure with the billions belco has made over the years there is enough to spend on energy efficient methods now instead of still burning fossil fuels. Instead belco plan to milk Bermuda for all they can before rolling out better ways to supply energy & work with individuals in government to put up red tape for other small companies trying to lead the way to hurdle over. What a farce this is.

  9. Burned again says:

    Bermuda truely is another world .

    In the face of the worst recession/ maybe to become a depression/ that has been seen in generations , BELCO decides it’s profits aren’t what they used to be and want to INCREASE rates ..
    Doesn’t anyone out there who owns a business understand ? There will not again for many , many years be money flowing like there was for the last 40 or so.
    Everyone is going to have to drastically cut back , and businesses are simply going to HAVE to expect less too. ALL businesses and ALL service providers ..
    When I go into a business/shop and see prices climbing as though everything is fine and dandy , I walk out ..without making any purchases.
    I’m now getting less than I have in many years and I have to use it sensibly ..They’re going to have to do the same too .

  10. Allan says:

    Turn off the lights turn of what ever you can make them hurt more nasty nasty nasty

    • Big Bad Wolf says:

      @ Allan: I agree… If everybody just use what electricity they need and shut off everything else. This winter sleep in your sweatsuit socks and your hat…

  11. N/A says:

    You know its greed when a MONOPOLY starts complaining about not making enough money!!! SMH..FML..WTF?!

  12. G THANKS says:

    BELCO FOR THE RECORD I LIKE TO GET KISSED BEFORE I GET ****ED!!

  13. joonya says:

    That’s what we get with monopolies. To hell with this, I’m gonna disconnect my main switch, and I’m gonna buy a big rat with a huge wheel.

    • Rats says:

      Check down gumment house… heard there’s lots scurrying around down dere.

  14. superdave says:

    They have had an increase already. My last three light bills have almost doubled. And to top it off I was away for two weeks in September! This island is ridiculous!

    • Pur-NRG says:

      You think that is something, I turned off my main breaker on a property and was sill getting charged nearly $50 a month for not using ANY power.

  15. wow REALLY says:

    WOW we are all going to be in the dark soon. I try very hard to keep my lights off and unplug anything not in use. My bill is the lowest I have seen it in years and then they top it off with a $200.00 fuel fee – CRAZY gosh.

    BELCO this is crazy. I really hope it is not approved. Can I get a Belco discount staff rate ? I surley contribute enought to the company gosh.

  16. True Dat says:

    HELL NO BELCO!!!!

  17. Jim Bean says:

    hey vince – nice and thanks – oh I forgot – you were smatted down!

    • The Defender says:

      How you get smatted down… does that required Jenny Smatt? What about the ladies on the board at warwick academy?

    • My Spanish Point says:

      Lame

      • Setting it Right says:

        There is nothing Lame about the statement SPANISH POINT. It is the truth and if you care to take the blinders off to see the REAL truth about those that you defend you would be better off.

        • My Spanish Point says:

          Not disputing and no blinders on here. Just thought the “smatted down” comment and name dropping were lame. Simple as that.

          • Setting it Right says:

            Well thank you for seeting that right.
            Unlike you some people may not know the real truth on why people have dropped names and other events.

          • Setting it Right says:

            Well thank you for setting that right.

            Let’s see when the rest of the truth comes out what gets said.

  18. Keep them Honest says:

    Solar Power! need another company , not Belco.Can the energy department open the door for this?

    • Big Bad Wolf says:

      All you people want government do something… Well make um build a power plant for the people…

  19. lemontree says:

    all the expats are gone or going they loved to use electricity now we have to keep the elecalite company going ourseleves dont complain its what we voted for
    ( I, me and mine )

    • True Dat says:

      what Nonsense you are talking lemontree?!?!????

      this don’t have a damn thing to do with expats!!!

      Ita about belco being Ridiculous!!!

      thatisall!!!

      • Lemontree Translator says:

        We voted Pee Ell Pee back in.

        Pee Ell Pee implements term limits on expat work permits.

        Expats leave.

        Fewer people using power.

        BELCO finally figures this out and decides if they can’t get people to use more power, they’ll just raise rates.

        • Keepin' It Real says:

          To “Lemonteree” and you “Translatoe” — you both sound really stupid!!!!!!! This has nothing to do with PLP, UBP, OBA, BDA or any other political driven group……..this is just BELCO doing whatever BELCO wants simly because there’s no one (competing company) to keep them on their toes and keep ther consumers/customers happy!!!

          Plus if you want to talk about all the expats leaving, lets talk about all the Bermudians leaving the island!!!!!!!!!!

          • Lemontree Translator says:

            Keeping it Real – keep drinking the green koolaid!

  20. alicia says:

    time to give AES a call to get some solar panels. It’s an investment but will pay for itself in no time at all given the increases in Belco’s rates.

  21. DISGUSTED says:

    I can’t believe this — what a bunch of jokers! As with SuperDave, the last time I was away for over 1/2 the month my electric bill increased. No valid explanation from Belco. There should be a law against this kind of greed!

  22. joonya says:

    This is a deliberate scheme.
    Election time is looming, and remember who just joined the PLP…??
    This was all planned, so that the PLP come out on top as the people’s saviours by not granting Belco permission to increase rates. POLITRICKS

  23. Chris Worboys says:

    Time to get some energy efficient appliances and generate your own solar electricity instead of buying it from the man! The more these rates increase, the quicker investments in energy efficient/renewable energy technologies will pay for themselves and the greater the long-term savings.

    Don’t be put off by rumours of $50k systems – most 2-3 person homes could install a solar water heating system for well under 10k or a heat pump water heater for under $5k and with a little attention to energy efficiency you could probably get more than enough power from a $20K solar electricity generating system! These technologies are likely to pay for themselves several times over within their operational lifetime.

    Check out the Department of Energy’s website, http://www.energy.gov.bm, for information on energy efficiency, renewable energy and the rebates currently on offer for solar hot water and solar electricity generation systems.

  24. David says:

    Don’t forget to read the material that BELCO has provided to the Energy Commission (see BELCO’s web site) so that we all know what the increases are for and why.

  25. Jus' Askin' says:

    What happens when the price of oil goes up? Businesses will continue to close as the cost of electricity will drive the nail in. BELCO will feel the pinch when more and more people wise up 😉

  26. No kidding says:

    “A statement issued by the company today [Nov.14] said, “BELCO did not increase rates in 2011, although it had approval to do so, due to economic conditions on the island.”

    The fuel adjustment has increased 30% since January 1. (17.5 cents now, vs 14.5 cents on January 1). So much for “no increase” in 2011.

  27. THE HELL!! says:

    You all know the increase is automatic this happens when ur a monopoly. They gotta keep the greedy share holders happy.. Greedy Bastards!!

  28. LOTS*4*SALE says:

    Time for hydro power . Belco reminds me of PRESIDENT Bush 40th when he shouted ‘NO NEW TAXES’ ,and everyone loved him , until he jacked up the existing taxes . We should e-mail Chavaz and tell him how BELCO is fleecing the people for his cheap oil .

  29. Tobacco Bay Resident says:

    I agree with what is being said – what about the fuel adjustment?!! They must be benefiting from that and my bill is the highest its ever been. And when I asked for an energy audit, which use to be provided for free, it now costs $100 for them to come out to your house! I was actually told yesterday that I should see if I have an electrician friend to see if there is a problem. Now is NOT the time for another increase when everyone is feeling the strain of the current economy.

  30. Tobacco Bay Resident says:

    And wasn’t it because of the fuel adjustment that the bowling alley at Southside had to close????? Another one bites the dust!

  31. Rockfish says:

    what I don’t understand is how people can complain about the fuel adjustment that BELCO charges and not the fuel adjustment felt at the gas pump??? I don’t get it – they like BELCO’s fuel prices fluctuate with the cost of fuel per barrell.. so if you want to point the finger at one company – you need to point the finger at all of them – namely Rubis and Esso. But I doubt that would happen as gas is ultimately an essential for everyones day to day functioning. Don’t point the finger at one – all of them need to be addressed.

    • THE HELL!! says:

      Rockfish I totally agree with u on that point. We are getting flogged at the gas pumps as well with the ridiculous tax that Government is putting on fuel. How can u do more with less when even less is costing u more?

  32. Molly millers says:

    Not enough is being done to conserve in Bermuda like all hot water tanks should be mandated to have timers on them same with recycling trash ,also water efficient toilets should be hey only ones used here now ,but is not in the money making interest so nothing is done
    And if folks are so anti this increase we should all stage black out days in protest

    • My two cents says:

      Let’s DO IT!!! Start a Facebook page? We can call it the Belco black out page.

  33. Friendly Faces says:

    END THIS MONOPOLY NOW!!

    You have got to be kidding Belco….

  34. My two cents says:

    We should start doing weekly turn your lights out around the island. Anyone on board?

  35. My two cents says:

    AS far as gas prices go, ride your bike to town if possible, car pool, ride bus! Hit them wear it hurts, consumers have the power, don’t forget it!

  36. My two cents says:

    Please all rich people on the island that care about Bermuda’s environment and don’t have shares in Belco, please go solar for all of us that simply can’t afford it