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Bermuda's electricity and imported gas for cooking

At premium prices from lack of economies of scale, huge import duties make them more costly

By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online

To refer to this webfile, please use "bermuda-online.org/electgas.htm" as your Subject

Electricity

With no rivers or hydro-electric plants or wind farms, all electricity is from imported oil and is very expensive compared to USA. Canada, United Kingdom and Europe.

In Bermuda, for domestic premises, the average per kilowatt hour (KwH) cost before tax (Fuel Adjustment Charge, FAC) exceeds (BD$ or) US$0.2102 (21.02 cents).  Plus, as Belco in August 2007 is paying between $89.17 and $109.85 per barrel of oil, the FAC is at its highest level ever of 10.2 cents per kilowatt hour, which currently accounts for approximately 30 percent of the total bill. Prices of both are approved by the Bermuda Government's Price Control Commission. Accentuating this is the Bermuda Government's huge import duty on this fuel oil, by far and away the highest tax in the world per square mile, for the generation of electrical power. These make electricity more than three times the cost of the product in North America, Britain and Europe. Compare this with the 14 cents per KWH cost average in the USA, Canada and United Kingdom, with no additional fuel adjustment tax of 25%. 

Bermuda's mere 20 square miles - more than 600 miles away from the USA in the North Atlantic - resident population of only 68,500 and obvious inability to have no economies of scale makes local costs very high.

For those without air conditioning in the summer or central heating in the winter or an electric range in the kitchen, and with only a small (12 gallon or so) hot water heater, the average monthly electricity cost in Bermuda for a 1 bedroom apartment is about US$ 110 without any air conditioning or heat or cooking by electricity. It is far more expensive with these included. 

One way to save on local electricity costs if facilities permit is to get a system known as Geo-Exchange from Bermuda Energy Conservation Ltd.

Newcomers to Bermuda should ensure the premises (apartment or flat or condominium or house) they rent or buy - see Homes - has its own electricity meter and should establish an account without delay. If returning to the UK from Bermuda after an employment contract, sell or give away your US-type appliances before you go and give one month's notice in writing to BELCO. On request, it will also give a written reference to a customer who goes abroad and uses another electricity supplier.

Electricity for heating, lighting, cooking and cooling is provided exclusively in Bermuda by the Bermuda Electric Light Company Limited (BELCO) at 27 Serpentine Road, Pembroke HM 07, Bermuda. Telephone (441) 295 5111. Fax (441) 292 8975. BELCO has a Bermuda Government legislated monopoly on the supply of electricity locally and is a local commercial joint stock company majority owned by Bermudian shareholders in only 21 square miles of territory. This means that unlike in the USA it cannot operate with maximum economies of scale. 

It began in 1904, commenced selling electricity in 1908 and was originally called the Bermuda Electric Light, Power and Traction Company. The demand for electricity has continued to increase and is always greater in the summer than in the winter.

Commercial users in Bermuda pay a lot less for their electricity usage than domestic users. Large commercial organizations use about 40 percent of all local electrical output.

Electrical power is NOT hydroelectric or solar or nuclear or wind generated, as they in the United Kingdom or Europe. There, these are set to supply the greater proportion of energy needs of the future. But Bermuda is not blighted, as they are, by onshore wind farms that spoil their landscapes, are expensive to maintain, need to be clustered and are grossly inefficient.

Belco has started a public consultation about plant location and alternative energy sources in order to better plan for the future. People have been asked if they would support the construction of a new power plant or sub-plant and where they think a new plant should go, if built. Alternative energy sources were also featured prominently, with people being asked if they were open to developments such as wind turbines and solar panels. The company's aim is to gather information that would allow them to assess the interest in various energy options in order to gauge what the demand for them would be over the next 20 years, especially with Bermuda's demand for energy expected to rise 1.5 percent annually over the next 20 years. What are people are doing now to conserve energy? Are they are interested in becoming more energy efficient? Do people want solar panels on their house or is that not aesthetically pleasing?

In February 2006 Belco signed an agreement with Current to Current Bermuda Limited to purchase up to 20 MW of power. The Massachusetts based corporation and Belco hope to sink the world's first underwater power generator off the south coast of the Island. The Current to Current scheme would capture ocean currents to initially provide nearly ten per cent of the Island's electricity needs.

Belco does not have off-peak rates. See and use a useful "Energy Consumption Calculator" in the Bermuda Electric Light Company Limited (BELCO) website. But add on a fuel surcharge tax, not mentioned on its website but charged to its customers by it, that in 2006 was as high as 44%.

In 2006, the Belco power station consumed nearly a million barrels of oil. With the Bermuda price of oil near $100 per barrel in February 2008,  it means Bermuda spends almost $100 million just on the fuel to keep the power station running, roughly $1,500 per person per year..

In Bermuda, the above are impractical or too costly and the architecture of most Bermuda homes don't allow them, so fuel oil - the most expensive way to produce electricity in the developed countries - is used exclusively. It is piped directly into the central electricity generating plant owned by the utility on Serpentine Road in Pembroke Parish, west of the City of Hamilton, via a mile underground pipe from the oil docks terminal at Ferry Reach, St. George's Parish.

To those with their own Bermuda homes - not most rented units -solar water heaters are expensive to purchase and have installed - partly because they too attract a significant Bermuda Government import duty and more - but may be able to pay for themselves in a few years. Also available, but again at high import duties and more, are air-sourced heat pumps and geothermal heating/cooling systems.

Recommended to all locals and newcomers are energy-efficient light bulbs and consumer electric appliances such as air conditioners, refrigerators, freezers and washing machines with an Energy Efficiency Recommended logo or North American equivalent.

There are two generating stations on 23 acres of property on Serpentine Road in Pembroke Parish. The East and West Power Stations contain a total of 12 diesel engines and 9 gas turbines. Two new engines come on-stream in 2004. About $21 million a  year is spent on plant and equipment. The type of fuel used depends on which engines are in operation. Heavy fuel is used to operate the four newest diesel engines which carry the basic load of power used on a daily basis. They are slower to start up than the gas turbines but are more efficient to operate. A very light diesel fuel called Cetane runs the six smallest gas turbines. They can be used almost immediately upon being started up. Both types of engines generate a maximum of 168 megawatts of electricity at a frequency of 60 Hz. A generator (alternator) produces alternating current. Voltage is about 18,500 volts. A generation transformer increases voltage to 22,000 volts to transfer electricity more efficiently over long distances. Transmission cables are made from copper or aluminum because they have low resistance. 

Underground cables are not as vulnerable to wind damage but cost more to repair than overhead cables.  In most rural and urban areas, the cables are overhead, not underground. But BELCO funded underground cabling in the Town of St. George to help improve the look of the town as it went for and got World Heritage Site status. All electrical cabling for new developments such as office buildings and hotels, both in the City of Hamilton and elsewhere are located underground. Otherwise, this is done only when customers request it and pay for it themselves. 

There is a major step down sub station where electricity is routed for commercial or domestic use.  30 substations transform high voltage to low voltage. For commercial use, transformers in large buildings and some other buildings transform low voltage electricity even lower to  120 or 220 volts. For domestic use, the electricity passes along high voltage poles to pole-mounted transformers to low-voltage poles to households.

Air conditioners are essential in Bermuda from May to October to live comfortably at home or in the office. Those who come to work and rent a three bedroom home with say two air conditioners running 24 hours a day to help combat Bermuda's hot and very humid months can expect to pay at least US $400 a month. If for fewer hours a month, calculate the electricity cost per air conditioner at about 19 cents per hour of use for an 800 watt unit (5,000 BTU), or 35 cents per hour of use per unit if 1500 watts (12,000 BTU or EER8), or 46 cents per hour of use per unit for a 2,000 watt unit.

At other times - November to April - note there is no central heating in most Bermuda homes and apartments. Some winter days and nights can be damp and chilly for non Bermudians accustomed to seasonal central heating. Some homes have a fireplace, while others may have a ductless split heat pump system with reverse cycle heat during the winter and air conditioning in summer. If not, electric heaters and separate air conditioning units for winter and summer comfort levels are available commercially. 

Hot water is expensive in Bermuda, about $30 per person per month for showers in one bathroom, proportionately more for two or more bathrooms. 

BELCO and the Bermuda Government - the Ministry of Transport, Ministry of Works & Engineering - partnered to form the Electric Vehicle Demonstration Committee (EVDC). Its mandate is to:

• Identify applications where alternative vehicle technology could replace the conventional internal combustion engine vehicle.
• Source appropriate replacement vehicles and initiate trial programs in Bermuda.
• Quantify the  value and benefit of electric vehicles on the environment.
• Assess the commercial availability and life-cycle cost of electric vehicles.

But they were not deemed to be practical for Bermuda at this time.

Festival of Lights

Every Christmas, this occurs - 2004 was the eighth such event - in a sponsorship by BELCO and the BF&M Insurance Group, with benefits going to charities. The festival provides an opportunity for individuals and businesses to join in the spirit of giving in the holiday season. They participate by completing an entry form, choosing their theme, then decorating with electric lights. Winners in the 13 categories have a cash prize going to the charities of their choice. Also, they got a credit to their electricity bills for the month of December. There is a first, second and third residential winner in the east, west and central parishes. There is one prize in the commercial category.

Outages 

98% of all electricity is from electricity poles placed in the ground. Thus the system often shuts down for days even during a moderate gale. BELCO's CEO realizes this but has stated correctly that having an all-underground system would not rectify the problem, would cost far too much, inconvenience far too many people using Bermuda's crowded small roads; and not be the technical answer. It is a national  problem, not a BELCO one. Prohibitive costs - about US$250 million - are one of many reasons why underground electric cabling is ruled out for most of Bermuda, unless supported  by the Bermuda Government and private sector organizations beyond BELCO.  The Bermuda Government is unable to commit funds to help BELCO put electric cables underground as it has more pressing commitments.

• Bermuda's assets in architecture do not save the Island from the major liability of having more than 75 percent of all its electricity shut down completely, in most cases not just for hours or part of a day but for days or weeks. 

• Only the few areas with underground wiring are spared. It is not realized by Bermuda's air and cruise ship visitors that when power outages occur, far more is lost than just the use of dishwashers, cable and local television, computers, electric can openers, electric clocks & clock radios, electric shavers, electric stoves, freezers, kitchen sinks, refrigerators, shavers, showers, stereo and CD or DVD systems, and other electricity-powered items. Unlike anywhere else in the world, each property in Bermuda adversely affected by a power outage also loses the use of all toilets, bidets, wash basins and kitchen sinks fed from electrical pumps from private (not mains or central systems) water tanks. 

• Only those fit enough to do so are able to walk to water tanks in homes or apartment buildings, to draw water by hand in buckets and haul them inside to pour into toilets and wash basins. 

• For the taxes they pay on real estate, about four times more on average than in the USA, Canada and USA, Bermudians and other property owners do not get centrally piped in water or sewage disposal. When power outages occur in Bermuda, everything in the house powered by electricity, including water pumps to run hot and cold water systems from the water tanks and toilets to flow into private sewage pits, stops completely. 

• No rebate from land taxes is offered by the Bermuda Government in such circumstances.  

• As a direct result, in this high Bermuda temperature and humidity, thousands of locals also lose hundreds of dollars each in frozen foodstuffs in their freezers, money which is not refundable by the utility or government.

• Only very few places have emergency back-up systems - their own generators - when outages occur. 

• In this heat and constant high humidity, many have no option but to buy generators. Does Government make it easy on them? No. The Government insists on its 33.3% import duty and with this duty also applied to gasoline, which, at over $6 a gallon in Bermuda to run the generators, makes the situation very difficult to those totally without power or water or phone service or television.

Computers at home or work

Most homes with computers and businesses running computers should have at least one UPS for each computer. For those without them, contact BESCO, a BELCO subsidiary, telephone 299-2800 or email bescosales@belco.bhl.bm. You can lease surge protection equipment for appliances, computers, stereo sets and televisions against damage caused by lightning or fluctuations in electricity.

Paying BELCO bills online

Log on to the Bermuda Electric Light Company Limited website. Double-click on the icon on the bottom left corner of the page, called "Your account." Follow instructions. Fill out on online registration form and physically take it to where specified. Also see your payment history, account history and more.

Why electricity costs are so high

LP gas companies

With no natural gas on Bermuda, all gas is imported and is very expensive compared to USA. Canada, United Kingdom and Europe. The Bermuda Government levies a very significant import duty on LP gas, the highest anywhere per square mile. 

LP gas (liquid propane) is available in Bermuda for cooking, heating, hot water supply, clothes' drying and other commercial purposes as an alternative to electricity, but is not produced in Bermuda. It comes from Argentina, is supplied by the giant Shell oil company and imported via one of Shell's locally based subsidiaries by tanker ships in bulk. It is then distributed by the three wholesale and retail commercial companies shown below - all Bermudian joint stock companies. The gas is not underground piped to homes and businesses on a metered system from a central plant. Instead, it is brought to premises in cylinders and piped to the relevant appliances.

Many homeowners and owners of commercial premises use liquid propane for cooking and other purposes, instead of electricity. For home use, there is a standard 100 lb. household cylinder, delivery included. It fluctuates in price. A cylinder lasts for about three months, depending on usage. Home users are billed immediately on delivery, with established customers having 30 days to settle the account. The cylinders remain the property of the company supplying them to households. When a current cylinder is exhausted, the company concerned will remove it and replace it with a fresh cylinder; and bill you for it. There are also barbecue cylinders. These come in the 20 lb. size and can be purchased by consumers. As well as for outdoor barbecue purposes, they are the source of heat for blow torches, etc. Customers can go to the companies and get them refilled immediately. 

Or they can go to the Bermuda Gas & Shell BBQ cylinder exchange program at Shell gasoline stations.

Newcomers will find a selection of new gas operated domestic and commercial stoves and other relevant appliances from reputable manufacturers in showrooms of various companies.

No vehicles in Bermuda use imported propane gas or any imported bio-fuels (unlike vehicles in the UK, Europe, USA. etc).

Bermuda Gas & Utility Company Limited. E-mail bermudagas@belco.bhl.bm. Phone 295-3111. Fax: 295-8311. Masters Limited 295-4321. Fax: 292-8396. Sunshine Company Limited, 295-6246.

Gasoline (petroleum) and oil costs.