RA Approve Reduction In BELCO FAR Rate
[Updated] The Regulatory Authority [RA] announced the “approval of a reduction in the Fuel Adjustment Rate [FAR] from the existing rate of 24.5 cents per kilowatt hour [kWh] to 18.4 cents per kWh, effective January 1st.”
A spokesperson said, “This decision follows a comprehensive evaluation of BELCO’s 2024 Q1 FAR submission indicating a decrease in fuel pricing.
“In recent meetings attended by key stakeholders, the RA reviewed the methodology for calculating the FAR with the best interests of the community in mind. This review reflects all entities’ commitment to the island, and the RA’s dedication to ensuring a fair, competitive, and innovative marketplace.
“The RA is dedicated to fostering a sustainable and advantageous environment for Bermuda. By leveraging the expertise of our knowledgeable team, we make data-driven decisions that are aligned with our objectives under the legislation. This adjustment in the FAR reflects the RA’s steadfast commitment to fulfilling its mandates under the legislation.”
“As an independent agency, the RA is driven by robust mandates and legislation that guide its operations. These mandates include ensuring fair market practices to protect consumers, prioritising investment in Bermuda, promoting innovation and sustainability within regulated sectors, safeguarding the rights and interests of consumers through transparent regulations, and overseeing the development and maintenance of critical infrastructure to enhance Bermuda’s overall well-being.
“The FAR calculations fluctuate based on the market-driven purchase price of BELCO’s fuel and consumer demand for energy. The fuel cost is determined by global market conditions, significantly influencing the FAR as it is used to generate electricity.”
Update 8.06pm: A spokesperson said, “Bermuda Electric Light Company Limited [BELCO] today advised that beginning January 1st, 2024 there will be a decrease in the Fuel Adjustment Rate [FAR].
“With the approval of the Regulatory Authority, the FAR will decrease from the existing rate of 24.517 cents per kilowatt-hour [kWh] to 18.362 cents per kWh.
“The new FAR will come into effect as of January 1st, 2024, until March 31st, 2024, and will be effective for all bills issued during that period.
“The FAR reflects the total cost to purchase and deliver fuel to the BELCO central plant and is comprised of two parts – the fuel adjustment and taxes.
“The FAR is calculated quarterly and primarily rises and falls as the purchase price of BELCO’s fuel rises and falls. BELCO does not earn a profit on the FAR; any savings due to a reduction in BELCO fuel costs are passed on to customers.
BELCO President Wayne Caines said: “It is certainly good news that the cost of fuel has decreased, contributing to a welcome decrease in the FAR. The Regulatory Authority holds us accountable when calculating the FAR and ensures that our fuel costs are reasonable and efficiently incurred. Customers can visit our website where they can find many helpful tips on energy efficiency.”
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“The RA is dedicated to fostering a sustainable and advantageous environment for Bermuda. By leveraging the expertise of our knowledgeable team, we make data-driven decisions that are aligned with our objectives under the legislation.”
So why does the RA refuse to release any cost spreadsheets for the offshore wind farm?
NOOO! Not “robust mandates.”
Does this mean we get a credit or rebate for the difference of 6.1 cents in the FAR? Im hoping this is the case.
There is no rebate to be given. Please read the article.
This change is due to the same process that has been occurring for years. The FAR is decreasing due to a decrease in the fuel price and both the RA and Wayne Caines have said that this is the case.
A [RA] spokesperson said, “This decision follows a comprehensive evaluation of BELCO’s 2024 Q1 FAR submission indicating a decrease in fuel pricing.”
BELCO President Wayne Caines said: “It is certainly good news that the cost of fuel has decreased, contributing to a welcome decrease in the FAR.”
When fuel prices increase then the FAR will increase again.
This was nothing to do with the PLP , but due to the reduction in the global price of fuel.