Column: Proposed $1M RA Budget Increase

October 17, 2019 | 9 Comments

[Opinion column written by OBA Senator Dwayne Robinson]

The cost of living in Bermuda remains a constant issue for Bermudians and the increase in fees and taxes imposed by the PLP have not made matters any easier.

Now we are seeing a proposed budget increase by an independent authority whose fees directly affect the cost of electricity, internet, and phone services.

Reflecting on the plight of my people caused me to look at the proposed $1m budget increase for the Regulatory Authority.

The RA is funded from regulatory fees collected from the electricity and electronic communication companies.

The RA is recommending to the Minister of Home Affairs an increase of the Electronic Communications Regulatory Authority fee of 0.15%, from 1.75% to 1.90% be approved for the fiscal year 2020-21. This sector currently generates 17.7 million dollars in revenue.

The proposed increases for the electricity sector are as follows:

  • Electricity TD&R service provider – no proposed increase;
  • Utility Scale Electricity Generation provider [greater than 25 MegaWatts of installed electricity generation capacity] – increase from of $5,500 from $1,000 to $6,500;
  • Fossil Fuel Bulk Electricity Generation provider [greater than 0.5 MegaWatts but less than 25 MegaWatts of installed electricity generation capacity] – increase of $5,000, from $1,500 to $6,500;
  • Waste-to-Energy Bulk Electricity Generation provider [greater than 0.5 MegaWatts but less than 25 MegaWatts of installed electricity generation capacity] and – increase of $500, from $1,500 to $2,000;
  • Renewable Energy Bulk Electricity Generation provider [greater than 0.5 MegaWatts but less than 25 MegaWatts of installed electricity generation capacity] – increase of $500, from $1,500 to $2,000;
  • Distributed Generation Standard Contract fee – $2 per kiloWatt of installed capacity; vii. Self-supply Generation License provider [greater than 0.5 MegaWatts of installed electricity generation capacity] – $6,500 per MegaWatt.

This may seem like Greek to many, but put simply: you will be paying more money. The cost will undoubtably be passed to the consumer in full or at least in part.

Bermudians are already fed up with their bills increasing, this will just add more of a burden.

I thought to myself, maybe this is the global standard, so I compared our RA to its Bahamian equivalent the Utilities Regulation & Competition Authority. Their statistics are displayed on their official website and I pulled some comparisons for the people of Bermuda to consider.

  • Fiscal Year 2019-2020 we are set to pay $3,599.000 for RA staff, this is proposed to increase in the fiscal year 2020- 2021 to $4,490,000. The URCA had a staff cost of $2,244,809 in 2018 which came under their budget by $160,905.
  • Fiscal Year 2019-2020 we are set to pay $1,428,500 for consulting services for the RA, this is proposed to increase to $1,545,000 in fiscal year 2020-2021. This money most likely goes overseas. There is no line item for consultancy in the URCA in 2018.
  • The Revenue of the Bermuda Regulatory Authority in the fiscal year 2019-2020 is set to be $6,352.000, it is proposed to increase to $7,514,000 in the fiscal year 2020- 2021. The URCA’S revenue in 2018 was $5,959,067.
  • The URCA of Bahamas also includes a Key Performance Indicator showcasing performance margins within their annual plans/reports. I could not find this within the RA’s report.
  • The population the URCA regulates on behalf of is approximately 390,000 people and our RA regulates on behalf of approximately 60,000 people. Scale that along with the comparative costs.

Why are our costs so high? The Bahamas’s URCA is a larger scale authority with more companies paying into its fees but our Regulatory Authority beats them in revenue by $392,933, and we are nearly double their cost in staff.

I understand that our economies are different and there are other variables to consider regarding price but I used this comparison to hopefully get answers as to why, even with the current budget matching a country with five times our population, that the RA would still need an increase?

The budget increase is to pay for studies into things like the Integrated Resource Plan, basically Bermuda’s national energy plan, and it is a complex undertaking.

However surely we can utilize the resources currently available to complete this large undertaking. The Bermudian taxpayer cannot take on any more increases in cost of living.

If this budget increase is cleared by the Minister, it will send a clear signal to the population that reducing costs for Bermudians is not a priority for this Government.

Companies within the electronic communications sector such as Digicel and One Communications have business ties elsewhere, how long will they endure these tax increases before they find other jurisdictions more appealing.

If they decided to downsize to prioritize other jurisdictions, or pack up entirely, how many Bermudians would be unemployed? Bermudians have limited choices currently, this tax and spend mentality could produce a monopoly as customer bases stagnant, and cost of doing business rises.

I encourage the public to engage in the consultative period the Regulatory has offered, which ends October 31, and express your opinions.

- Dwayne Robinson

testimonial-divider

20 Most Recent Opinion Columns

Opinion columns reflect the views of the writer, and not those of Bernews Ltd. To submit an Opinion Column/Letter to the Editor, please email info@bernews.com. Bernews welcomes submissions, and while there are no length restrictions, all columns must be signed by the writer’s real name.

-

Share via email

Read More About

Category: All, News, technology

Comments (9)

Trackback URL | Comments RSS Feed

  1. Hey grasshopper, did you have interest in de plight of ya people when SpongeBob told seniors money dont grow on trees and turned around and gave Billionaires $77Million for a sailboat race and didnt give seniors nor Workers an increase de entire time they were in but wanted more Furlough days.
    LMAO

    • Question says:

      The PLP have no interest in reducing costs. They want all Bermudians to pay higher and higher taxes.
      They are taking away what other people earn.

  2. Charlie Swan says:

    Hi Dwayne
    I read this article, and I too share your questions..along with others of my own.
    Those involved with Bermuda’s Regulatory Authority, and within Government, will state that Bermuda should not be compared with other jurisdictions.

    The bottom line with this argument is that they will use our remoteness, cost basis, standards etc as justification for their argument…without considering their role in the cost!

    If you can, please look at comparisons regarding:
    A. The proportion of our RA budget that goes to consultants.
    B. The number of lawyers employed. How many lawyers does it take to change a light bulb…?
    C. The average salary for respective Authorities – compared to Bahamas AND other jusrisdictions.
    D. The results of all RA requests compared with the benefits to the end users in their respective countries.

    Also, Bermudas National Energy Plan is just that – its Bermuda’s – no one else’s. Why on earth can we not find the knowledge and expertise to STUDY, DEVELOP and TWEAK it right here on this island.

    WE know where we are.
    WE know our climate.
    WE know our infrastructure, geography and topography.

    WE built this place after all.

    Agreed, the National Energy Plan is NOT a job for lawyers….so why does our RA need more?

    Further, its great to sell our island to potential overseas investors..touting the strength of our regulation, rule of law etc etc

    However when the rubber meets the road…who would want to attempt a start up or business here – regulation is onerous, our people are wary of outsiders (taking jobs, sending money overseas etc).

    Bermudas success in the past was built on embracing foreigners and their investment. This requires open and transparent governance that enhances positive engagement by our citizens.

    A positive engagement built on welcoming, friendly and sound practices…not on fear and denigration.

    Some might think we are shooting ourselves in the foot.

    Respectfully
    Charlie Swan JP

  3. When are bermudiand going to say says:

    NO MORE TAX INCREASES–

    This current trajectory of this administration should have marchers convening at Parliament–but what that???? crickets…

    Is is misplaced priorities?

  4. Joe Balboa says:

    And here’s a fact that many dont know: there is literally no incentive for this government to charge and collect less from industry participants because half of any dollar that is left over as surplus by the RA is handed over to the governments current account. Bizarre right? Quite the money making scheme if you ask me.

  5. Joe Bloggs says:

    Get real! The PLP Government effectively devalued the Bermuda dollar on 1 April 2019 by increasing Foreign Currency Purchase Tax by 25% Where were your howls of protest then? Stop playing political game and do something! Someone! Anyone!

    • Not exactly says:

      Joe, the OBA has repeatedly critised how the increased FCPT devalues BD$ wages and unfairly shifts more onus onto Bermudians primarily.

      • Joe Bloggs says:

        Exactly. One party complains about the other. Nothing actually gets done.

  6. Charlly X says:

    Nice to see your interest in politics aka politricks . But no matter who’s driving the bus you’ll always have difference of opinion as to how n where it should be driven. Ika remember when they increased duty on cars to prevent private importation. Where did the extra revenue go ? The Red team vs The Green team. Which church shall I pray? What color Kool aid ? SMH
    Both Political Parties and the secret society have driven the Pink n Blue to where it is Now ! So to call the frying pan and not the tea kettle to blame is dumb . For Every Red failure there has been a green failure.
    Just do some real research . Go back 30years till now .
    Different lipstick same pig .
    To bad We don’t think beyond skintone n think Collectively
    Hmmmm ! The tale of the two Bermudas . It’s like two banks wanting you to invest your money with them but ridiculing each other to you !
    Just do your due diligence and research

Leave a Reply