HAMILTON, Bermuda, CMC – The government says the recently announced increased electricity rates will be scaled back, as an amendment will be made to the method used to calculate the Fuel Adjustment Rate (FAR).
Home Affairs Minister Walter Roban, in a statement on Monday night, said that the customers of the electricity company Belco “will soon be advised of the changes to the FAR, which will reduce the recent increase in consumers’ energy bills.”
The Regulatory Authority (RA) had approved a request from Belco, a subsidiary of Canada’s Algonquin Power & Utilities, to increase the FAR, which increased electricity bills by an estimated 20 percent from October 1 this year.
Consumers had staged a protest outside the Belco headquarters, and Roban had said he would consider taking legal action against the RA if it did not lower the FAR. He had also demanded that the RA explain the methodology used to calculate the FAR.
But Belco president Wayne Caines defended the increase, saying that the numbers were correct and were a result of global oil price increases.
Caines was backed by the chief executive of the RA, Abayomi Carmichael, who defended the increase and insisted it was necessary and justified.
On October 6, during a news conference, Roban said he was taking on the RA and Belco, which has a monopoly here, telling reporters that the RA had always acted with integrity. Still, in this instance, it needed to be confirmed that the authority was operating “according to the law.
“This increase is not in the public’s best interests, and this decision does nothing but cause hardship. The ripple effect will be massive, stifling job growth and economic recovery, hitting seniors and hard-working families hardest and discouraging investment in tourism development at a critical time.”
But a spokesman for the Ministry of Home Affairs said that legal action had been averted after the two sides and representatives from Belco and Sol Petroleum held a meeting last Thursday.
“Ultimately, any decision regulating the cost of energy must have the best interests of the public consumer in mind. Following this meeting and agreement, I am satisfied that we can avoid costly litigation related to the recent increase,” Roban said.
“The Ministry of Home Affairs will continue directing policy and giving general direction as prescribed by The Regulatory Authority Act 2011, which includes remaining committed to finding responsible and sustainable energy solutions that will best serve the interests of both businesses and residents in the long term.
“This includes the ministry’s commitment to follow the principles and guidelines established under the Regulatory Authority Act 2011,” he added.
In his statement on Monday night, Roban did not say if Belco and the RA were also considering adjusting the Feed-In Tariff, the rebate that Belco gives properties that use solar power.
The rebate was cut dramatically at the same time that the FAR was increased.
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