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By Keith Archibald Forbes (see About Us) exclusively for Bermuda Online
The voltage system is 120 volts, 60 cycles - same as in North America. Some larger appliances use 220/240 volts, smaller ones and lights use 110 volts. No UK-produced consumer appliances will work in Bermuda. Electricity for residential - mostly at 120V - 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. The Ascendant Group has seven operating companies: Belco, Bermuda Gas & Utility, iFM Ltd, iEPC Ltd, Air Care Ltd, Purenergy Renewables Ltd, and Ascendant Properties Ltd. Belco began in 1904, commenced selling electricity in 1908 and was originally called the Bermuda Electric Light, Power and Traction Company. It has a Bermuda Government legislated monopoly on the supply of electricity locally, is the sole supplier to the government at a preferred rate and is a local commercial joint stock company majority owned by Bermudian shareholders.
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.
The demand for electricity has continued to increase and is always greater in the summer than in the winter. Belco is presently capable of generating up to 152 megawatts of electricity. Large commercial organizations use about 40 percent of all local electrical output.
Belco does not have off-peak rates.
In Bermuda, the architecture, closeness to others and small land size of most Bermuda homes, plus the complete lack of any rivers, nuclear plants, etc. don't allow alternatives - often, less expensive - such as wind farms or solar panels or ground source systems, so imported fuel oil 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 9-mile 6 inch underground pipe from the oil docks terminal at Ferry Reach, St. George's Parish.
Belco staff monitoring electricity usage. Royal Gazette photo
Solar and other renewable energy sources may be cleaner and cost-effective elsewhere, but in Bermuda they are still considerably more expensive than oil. Recently, during a Bermuda visit, former CIA director James Woolsey urged Bermuda to go solar, saying the Island needed to end its nearly 100-percent dependence on imported oil because the cost of petroleum had become increasingly volatile and unpredictable. But the cost is unrealistic. However, Belco is exploring importing natural gas, which could be a “promising alternative” to oil. Belco supports reducing reliance on imported fossil fuel (oil), noting that its “Energy Equation” for Bermuda called for renewable energy sources, including solar. Belco’s own target is 20 percent of energy produced from renewable sources by 2020. That said, renewable energy resources, such as solar and wind, provide only intermittent power; that is, only when the sun is shining or the wind is blowing. Belco alone is responsible for providing secure, reliable power, meeting the Island’s base load, likely to continue with conventional fossil fuel generation, although it is exploring the liquefied natural gas as a cleaner alternative. Currently, there is no commercially available wave or tidal power generation equipment; all such technologies are in the research and development phase.
Liquefied natural gas has been converted temporarily to liquid form for ease of storage or transport. (It’s estimated 23 percent of America’s energy comes from natural gas). Belco believes significant infrastructure would be needed to offload and store imported natural gas, and there would be costs associated with conversion of the generating plant. Belco supports the introduction of large- and small-scale renewable energy installations, however it does not have responsibility for encouraging solar or other alternative energy use in Bermuda. That responsibility lies with the Bermuda Government, in particular with the Ministry of Environment, Planning and Infrastructure Strategy, as well as the Energy Commission, which regulates Belco. The Bermuda Government also has authority over where such installations would be located, and Bermuda’s limited land mass makes location of large solar installations challenging.
Belco has established an Interconnection Policy for any residential and commercial renewable energy installations. The Interconnection Policy is for those interconnecting their commercial or residential alternative energy installations with Belco’s transmission and distribution system. They must meet certain technical specifications to ensure that they are operating safely, and that they don’t compromise the overall system.
Presently, 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. The type of fuel used depends on which engines are in operation. Heavy fuel, used by 82% of the entire system, powers 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. 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.
Belco's central plant needs to be redeveloped. It wants a new North Station, located between Cemetery Road and St John's Road. It will initially feature several 18MW diesel engines along with a 65m (213ft) smoke stack, storage tanks and external radiators. Once the new facilities are in place, Belco plans to decommission its oldest power station, located to the north of the Belco offices. Belco has said that the new site needs to be in place by 2013 in order to guarantee reliable power delivery throughout the Island as several of the plant's generators are already working beyond their normal service life. According to the company's long-term plan, new diesel generators will be built within the site's existing footprint as older generators are decommissioned. While Belco believes that fossil fuels will continue to make up the backbone of the Island's electricity system, it has set a goal of having 20 percent of Bermuda's energy coming from renewable sources by 2020. The company believes that Bermuda could see the construction of a large-scale solar farm by 2015, and an offshore wind farm by 2018.
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.
In Bermuda, for domestic premises, the average per kilowatt hour (KwH) cost before tax (Fuel Adjustment Rate, FAR) is huge by international standards. It is higher than any of the countries named in the International Energy Agency's key world statistics report. The cost to Bermuda consumers is per KwH, plus the Fuel Adjustment Rate of 19.5 cents per Kwh.
2015. October 2. Government notices published under the Public Access to Information Act listed more than $1.2 million in consultancy contracts. According to one of the notices, $544,905 was paid to Castalia Ltd by the Department of Energy for “policy and legislative consultation” for recent consultancy work. Castalia’s website states that the company assisted the Government create the new National Electricity Sector Policy, which was introduced in June. “To develop the policy, the Castalia team set up a high-level electricity sector generation model, and participated in several rounds of public consultations and workshops to gather feedback on policy proposals. The Castalia team also drafted the policy, in close co-ordination with the department and the ministry. Castalia’s advisory now transitions to helping draft the new electricity sector legislation that will give legal effect to the policies articulated in the policy. Castalia will also help the ministry and the electricity regulator develop a licensing regime for generation.”
2015. September 25. An open discussion about the potential adoption of natural gas in Bermuda is scheduled to take place tomorrow at the Bermuda Aquarium Museum and Zoo. The event, organized by the Bermuda Association of Professional Engineers (BAPE) and the Institution of Engineering and Technology, will feature a presentation by Soren Maloney, a senior project engineer at OSCOMP Holdings LLC in Texas along with a question-and-answer session. According to a spokesman, the presentation will neither be for or against the adoption of LNG as a fuel source in Bermuda and will note the benefits and drawbacks of such a scheme. Spaces at the event are limited and, while admission is free for BAPE members, the entrance fee for non-members is $15. The event runs from 5pm to 6pm, with the presentation beginning at 5.30pm. Light refreshments will be available.
2015. August 29. By Lars G. Josefsson, chairman and chief executive officer of BioElectric Solutions AB, Sweden. "The national electricity sector represents the backbone for any modern society. When Bermuda’s energy system emerges from its continuing transition, oil and diesel will have been replaced by more modern sources of energy. Bermudians will have to live with these new sources for generations to come, for good and for bad. The universal requirements for a forward-looking energy system are affordability, reliability and sustainability. It is imperative for the welfare of present and future generations that any proposal is evaluated against these criteria. Bioenergy is the world’s largest source of renewable energy, constituting about 10 per cent of all energy consumed. About half is modern, efficient use, eg, for transportation fuels, electricity and heating. The other half is traditional, inefficient use for cooking and heating. Unlike wind and solar power, bioenergy has several similarities with fossil fuels: both are chemically bound energy that can be easily stored, transported, processed and used for electricity, heating and transportation. This makes it easier to replace fossil fuels with bioenergy than with solar and wind. When processed into a commoditised form, eg, wood chips or pellets, bioenergy can be transported and traded between markets and countries as in between Europe and North America. It essentially acts as a renewable type of fossil fuel, combining the flexibility and controllability of coal with the sustainability of wind or solar. As such, bioenergy is an ideal source of base-load electricity, even for countries with limited forest or agricultural resources, as is the case for Bermuda. Adding shares of wind and solar power is easy, but with increasing shares come an increasing need to balance the variability, eg, cover demand when wind and solar are scarce or to handle surplus. Rising shares of intermittent, renewable sources such as wind or solar are accompanied by rising total costs and technical difficulties with stabilising the grid. Instead of relying on fossil fuels, biomass can play this balancing role and thereby take us closer to an energy system based on renewable energy only. A modern biomass plant has full controllability and can easily and automatically handle the gap between the actual consumption and the generation from variable and non-controllable sources, such as wind and solar. As noted in the Clean Power Plan, released on August 3 by the Obama Administration, there are different views on the sustainability and carbon neutrality of biomass. Fundamentally, the photosynthesis is “the technology” enabling the existence of bioenergy. Obviously, a tree that is combusted releases carbon dioxide and, unless compensated by a balancing plant growth, the action would mean a net addition of carbon to the atmosphere. Therefore, sustainable forestry and agricultural practices must go hand in hand with bioenergy use. When done properly, high biomass use for energy and carbon neutrality can be truly mutually inclusive, as is the case for Sweden. Since 1990, the use of biomass for energy has doubled and now covers one third of the total energy demand, which is a significant contribution to lowering the country’s carbon footprint. The bioelectricity is delivered by 91 power plants with an average capacity of 30 MW. Bermuda could benefit greatly from the development of a modular biomass power plant. Each module should comprise some 15 to 20 MW, with the total number of modules to be determined by the share of wind or solar in the system. The system could retain some oil/diesel capacity to cover peak-load consumption. Our in-depth analyses of introducing bioelectricity on the Island to replace oil and diesel as base load:
• Show lower end-user prices compared with known alternatives (ie, “affordability”)
• Enable attractive long-term supply contracts for wood pellets from the US (ie, “reliability”)
• Reduce climate gas emissions significantly compared with any other available and adjustable source of energy (ie, “sustainability”)
• Secure competitive returns for investors (ie, “profitability”)
Furthermore, bioelectricity will be on the grid no more than 24 months after the last permit is in place and carries no risks out of the ordinary, neither technical nor commercial.
2015. July 18. Customers may get lower electricity bills as the Bermuda Government warned Belco it could face healthy competition from alternative power suppliers. Under a draft Electricity Bill tabled in Parliament, Belco will retain control of the grid — but Grant Gibbons, the Minister of Economic Development, expressed hope more entities will enter the market. Dr Gibbons told The Royal Gazette a regulatory authority would be tasked with “looking for others out there that could supply our electricity demands”. He said: “This is providing the ability to get independent power producers and bring down customers’ bills.” Dr Gibbons said potential new providers could be a natural gas plant or solar farm on the disused “finger” runway at LF Wade International Airport, or a hotel installing a generator and selling off its excess to the grid. Encouraging renewable energy use by residents and small commercial operators is another feature of the document, tabled for consultation and expected to be formally submitted early in the next parliamentary session. The proposal suggests Belco will integrate a resource plan, which would then be directed by the regulatory authority. The grid itself would remain under Belco’s control, and the utility company would continue to control the billing of customers. Dr Gibbons said: “There is no point from an economic perspective to have someone else putting up new poles and installing new transmission cables. “That remains the responsibility of Belco. If someone else needs to build that, it will simply get passed on to the customer. It’s the generation part that we’re looking to get competition.” He described the move as diversification rather than seeking to break a monopoly, but told the House of Assembly Belco would be “carefully regulated to ensure accountability” in return for its sole provider status. Measures such as the 2013 Customs duty break for energy-saving thermal storage technology stand to continue once the legislation is passed, Dr Gibbons said. The bill also seeks to “facilitate the use of renewables, because they make good economic sense for Bermuda, and not through the extensive subsidies which exist in some other jurisdictions”, Dr Gibbons told the House. Later yesterday, legislators approved a draft order to convert the 80-acre “finger” into public land for use in electricity production. Shawn Crockwell, the Minister of Tourism and Transport, said the area had been identified as the only available land that could accommodate a large scale solar power plant, capable of providing 25 per cent of the Island’s power. Under the Civil Airport Amendment, the airport’s lines would be redrawn, making the finger public land under the control of the Minister of Public Works. Both Lawrence Scott, the Shadow Minister of Transport, and Marc Bean, the Opposition leader, pointed out that the finger is much-used at present. Hazardous materials are stored at the vacant runway and aircraft are diverted there in emergencies, as well as military aircraft, the Opposition said. “That finger is strategically necessary, not just for us but for many foreign militaries,” Mr Bean said, requesting to hear contingency plans. Mr Bean conceded that the south-facing finger alongside Castle Harbour was an ideal site for solar energy, telling MPs that a company had lobbied for its use as such under the Progressive Labour Party administration. However, he said there were no other sites in the Island that could be used as effectively to store hazardous materials. Mr Crockwell replied that it was necessary to split off the finger from airport land because of the negotiations for the redevelopment of an air terminal. “Government does not want this piece of land to be part of that discussion,” Mr Crockwell said. The order was subsequently approved.
2015. June 30. A Bermuda company has a $2 billion plan to lead the Island to energy independence within ten years. The ambitious project, which aims to give the Island an electricity supply fuelled entirely by renewable sources, has been in the works for two years. Urban Maximum Industries (UMI), headed by founder Craig Looby, is spearheading the plan, along with US firm Hydrogen 411 Technology. The group has already showed their ideas, which entail using a mix of wind, solar and hydrogen fuel to power the Island, to Government representatives in preliminary discussions. They believe the project can be funded entirely from private-sector sources and say they have already lined up investors ready to commit about $500 million if Government gives the necessary permissions to realize the project. The pay-off for the Island, they argue, is that Bermuda would eradicate the hefty fossil fuel bill that it foots today in order to power the Island. In a press release yesterday, UMI said: “If you were surrounded with an endless amount of clean fuel would you choose to ignore it and import costly dirty fossil fuel?” The news comes as Belco is putting the finishing touches to its Integrated Resource Plan (IRP), which offers the utility’s vision for the electricity supply of the future, and is expected to be submitted to Government next month. The plan includes Belco converting its Pembroke power plant to burn to burn natural gas instead of heavy oil and diesel. There are also solar and energy conservation components to the IRP. Mr Looby believes Bermuda should have alternatives to consider. He is quick to point out that he has no background in energy or engineering — his professional experience is in media production. But driven by a desire to find a way to wean the Island off its fossil fuel dependency, he has contacted experts in the field of renewable energy, as well as engineers, accountants, financiers and architects, who could help to make it happen. The inspiration for the ideas came after Mr Looby suffered a health scare in 2011. “After I got out of hospital, I was looking at how we could solve the biggest problems facing Bermuda and energy security was one. So I did some research into the options that could be put in place in Bermuda to get the Island on a path to energy independence.” With Government having put forward its proposals for electricity policy last Friday and Belco about to make public its own vision, Mr Looby is well aware that decisions made now will have an impact for generations to come. “We are at a crossroads. This is a once-in-a-lifetime opportunity for Bermuda to free itself from fossil fuels.” During the research, he came across Hydrogen 411 Technology, a consulting firm that specializes in numerous forms of alternative energy. The company’s founder John Ballor, a former professional musician and Emmy award-winning cameraman, has a passion for renewable energy and believes Bermuda’s economy could be transformed by a switch away from hydrocarbons. "There is a basic problem with both solar and wind energy — when the sun isn’t shining or the wind isn’t blowing, there are interruptions in supply. And any electricity system has to have sufficient capacity to meet peak demand — which Belco reported as 107 megawatts (MW) last year, down from 123MW as recently as 2010. The UMI plan could overcome those problems with generator sets powered by hydrogen fuel — derived from seawater through the process of electrolysis. Hydrogen fuel can also be used to fuel cars, buses and trucks equipped with a fuel cell, another aspect of the UMI plan. A group of wind turbines, probably eight, each capable of generating 8MW, would be a major part of the renewable capacity. The turbines would be 20 to 25 miles offshore. They would be off the south shore of the Island, not in the way of shipping lanes. We would look to generate another 50MW from solar power, using panels installed at homes and businesses. Bermuda does not have enough land for large-scale solar farms.” So if such a system were built during several phases at a cost of around $2 billion, what would happen to our electricity bills? “We have projected several amortizations and what we’re looking at is paying about half of what you’re paying now, based on a 20-year amortization,” Mr Ballor said. The plan envisages a future in which the only fuel costs will be the maintenance and costs involved in making hydrogen fuel, freeing the Island from oil and natural gas market volatility, making the economy more competitive by helping energy-guzzling businesses to slash their costs, while residents enjoy lower electricity bills and no pollution from the burning of hydrocarbons. While it may sound like a utopian dream, Mr Looby said UMI has the support of many Island residents who believe it can become reality. “We have been fortunate to have a great cross-section of Bermuda professionals on board with this, the support has been there from the get-go,” Mr Looby said. “Everybody’s very excited.” The group of people working on it had included architects, financial services professionals, those in the power sector and transport sector. UMI says it wants to work with Belco, although it has not yet managed to hold talks with the utility’s representatives. “We welcome Belco shareholders to contact us and work with us,” UMI stated. “Potential local investors, we would be interested in speaking with you, as our model has a much wider deployment scope, that goes beyond Bermuda. We want to let the public know this new plant build is not going to use tax payer funds, will not require electricity rate increases, will create short-, medium- and long-term jobs and let them know the deployment can spur wage increases in tourism and drive increased tourist air arrivals by making Bermuda and hotels more competitive.” UMI intends to add detail to its vision in the coming weeks as part of the upcoming national debate on the future of the Island’s electricity supply.
2015. June 29. Power firm Belco has given Government’s new electricity sector policy its cautious backing. The news came after Government on Friday said it wanted high-quality, low cost power services — as well as methods that were kind to the environment, secure and came from a mix of production methods. Minister of Economic Development Dr Grant Gibbons also told MPs that the existing Regulatory Authority, which at present looks after telecoms, would act as a watchdog as the industry moves away from a Belco monopoly. And Dr Gibbons said that Government was still considering whether liquefied natural gas (LNG) could be used as a cheaper and clearer alternative to fuel oil to generate power. He added that Belco — which owns the national grid — would also become the sole buyer of power from all generators and would have to have a “non-discriminatory” policy towards independent suppliers. A spokeswoman for Belco said: “Government engaged various stakeholders, including Belco, in a consultative process to reform the energy sector when developing the national electricity sector policy. “We look forward to ongoing dialogue with Government about aspects of the policy, including Belco’s role as the owner and operator of the Island’s electric grid and, therefore, the sole purchaser of energy coming into the network from multiple sources. We support Government’s development of clean energy goals and the establishment of a Regulatory Authority to oversee Bermuda’s energy industry, including all independent power producers.” Belco has said that it hoped to make a $170 million switch over from expensive oil-based generation to liquefied natural gas (LNG) by 2019. Dr Gibbons said that LNG deserved “serious consideration” as a replacement for diesel and fuel oil. "But there are still many issues to be considered and we are in the process of securing the necessary expertise to assist with that analysis. Further discussions on LNG would lead to initial findings being published before the end of the year." Belco has 17 generators, of which five are combustion turbines and 12 reciprocating engines, which work like diesel engines. Most could be converted to run on LNG — but the oldest ones, which are around 30 years old and already inefficient by modern standards, could not. The firm has said LNG could be shipped in from the US, stored at a purpose-built terminal where it would be turned back into gas and then piped to Belco’s Pembroke plant. Belco is planning to submit its Integrated Resource Plan (IRP), its own vision of the future of Bermuda’s electricity supply, to Government within weeks.
2015. June 27. Minister of Economic Development, Grant Gibbons, yesterday led a take note debate on the National Electricity Sector Policy of Bermuda in the House of Assembly. Dr Gibbons said the policy “represents a significant milestone in the evolution of Bermuda’s energy policies”. Objectives include the provision of high quality electricity services at the least cost, that are environmentally sustainable, affordable and secure. Other initiatives include the consideration of the viability of introducing LNG (liquefied natural gas) for power generation, opening the energy market to Independent Power Producers, and the transfer of regulatory responsibility to the Regulatory Authority (RA). One Bermuda Alliance MP Glen Smith said that Bermuda must join the rest of the world by providing cleaner and more sustainable energy sources that are more reliable and financially viable and welcomed the transfer of regulatory responsibly to the RA. Mr Smith said that using natural gas would be a lot cleaner, but concluded that Bermuda must step up its energy alternatives. MP Jeff Sousa said the main objective of the policy was to open the market so it can be more competitive and drive down energy costs. Some members of the Opposition, however, raised concerns about the policy. Shadow Minister of Economic Development, Wayne Furbert, called for action to be taken more quickly, stating the policy was not as comprehensive as he had hoped. Mr Furbert questioned if Government would consider introducing a sovereign fund for consumers to fund the installation of solar systems on their property instead of having to take out a bank loan. He also said that Government should consider nationalizing energy distribution because of the “smallness” of Bermuda. Shadow Minister of Public Safety, Walter Roban, said the policy was “very specific” and “much more limited” than the 2011 Energy White Paper. He added that it does not appear to be “pushing aggressively for any targets” and called on Government to provide a progress report on present energy consumption and where the Island is in relation to previous targets. Mr Roban also questioned why solar power was the only alternative energy source mentioned in the report and added, “our goals should be bigger with solar.” He said commercial use of solar could be expanded and suggested placing solar arrays on commercial buildings because some roofs are used “for absolutely nothing.” Mr Roban also said an effort should be made to change the Building Code to include provisions for solar systems, and that consumers should be encouraged to install them when they renovate. Opposition Leader Marc Bean said the report showed a continuation of the work begun by the previous Government, but added that the overriding premise in switching to natural gas, which would be “much cleaner environmentally”, would still be an economic one, not an environmental one. He also called on the Government to ensure that the cost of BELCO transitioning to natural gas would not be shifted to the consumer. Furthermore, Mr Bean called for the energy strategy to be directed towards alleviating the struggles of those who are already having a hard time paying their monthly bills. “As legislators our focus should be on those who can least afford it. The initial cost of solar installations is still off-putting to consumers because it is too much of a cost” for some to pay back the initial expenditure over 2½ to three years. I call on Government to consider other energy options, such as tidal energy and generating electricity from the Pembroke dump."
2015. June 8. Hotel operators are likely to look at alternative ways of power generation, such as installing solar panels, in the wake of electricity price hikes proposed by Belco last week. Commercial users face an average increase of 15 per cent on their monthly electricity bill, with the largest commercial users seeing a rise of between 8 per cent and more than 20 per cent, according to the utility company. For hotels, the cost of electricity accounts for a significant part of operating expenses. And while hotels can reduce electricity usage to some degree, they also have obligations to ensure public areas are well lit and guest facilities, such as heating and air conditioning, are maintained at appropriate levels. Responding to news of the proposed increase in electricity prices, Stephen Todd, vice president of the Bermuda Hotel Association (BHA), said: “The concern that we have is this represents a significant increase to the overall expense that each of our members would incur. “They would have to look to see if they can reduce electricity consumption.” Mr Todd said hotels already have plans and programmes in place to minimize operating costs. He added that hotels would probably look at alternative methods of sourcing electricity, such as solar energy. “That may be a consideration, although it would come at an initial cost.” Mr Todd said the BHA was still in the process of assessing the likely impact of the proposed hike in electricity rates. Belco’s proposed changes to the base rate, which were announced last Wednesday, have been submitted to the Energy Commission, which has the final say on whether or not to permit the new rates. The utility firm also wants to increase facility charges by one fifth. Mr Todd said hotel operators are continuing to work to attract more guests to their properties, and would therefore be cautious about countering additional operating expenses by increasing room rates. Other businesses on the Island with high electricity usage are thought to have similar concerns about the impact of the proposed hike in electricity prices. The MarketPlace supermarket chain, which operates from eight locations across the Island, estimates it would face paying at least an additional half-a-million dollars for electricity each year if the proposed new rates become a reality.
2015. June 5. Grant Gibbons, the Minister for Economic Development, gave a ministerial statement on the new National Electricity Sector Policy that he presented to the House of Assembly this morning. Calling it a “key step” in changing how Bermuda sources and uses electricity, he said: “The principal policy objective is to facilitate a high-quality, secure, affordable and environmentally sustainable electricity service for Bermuda at the lowest possible cost through the creation of a new energy framework.” He pointed to continuing developments in renewable energy, energy efficiency and conventional energy. Dr Gibbons added that it would “give Bermuda the opportunity to significantly change how it sources and uses energy.” The new policy recommends the creation of a new Act which transfers regulatory responsibility from the ministry to a regulatory authority. Answering questions, he said the utility would have the right to have exclusive responsibility for the provision of transmission, distribution and retail services, and in return for that exclusivity, be subject to more rigorous regulatory oversight by the Regulatory Authority of Bermuda, including having its efficiency benchmarked against other jurisdictions. Dr Gibbons added that the implementation of a large-scale, solar-generating facility on the “finger” of the airport will be the subject of a competitive procurement process. “I am hopeful in the middle of this summer that we have an RFP ready to go out,” he said. The minister added that the Department of Energy is also considering the viability of introducing LNG for power generation in Bermuda and a review of the customs tariffs for various energy fuels.
2015. June 4. Belco urgently needs to be allowed to increase its electricity rates in order for Bermuda to continue to enjoy a “first-world” electricity system. That is the view of Walter Higgins, the utility’s chief executive officer, who said a continuation of “abysmally low returns” posted in recent years would deter the investors who provide Belco’s capital base and its ability to make the investments necessary to maintain its creaking infrastructure. “The returns have become so untenably low that at some point you’d have to ask yourself why any rational person would invest in this business. The company must be viewed as a viable investment for either a debt provider — like a bank or a bondholder — or for any investor you might want to attract by issuing new shares. It does not look like a viable investment today with falling sales in a rising cost environment. So we have to do something about that. As much as we would like some magic solution that doesn’t involve increasing the rates, there really isn’t one.” Asked why expenses were rising even when Belco was producing less electricity, Mr Higgins said the rising cost of pensions, healthcare and maintenance were principal drivers. “Many of the engines are already past the age at which they should have been retired,” he said. “Not only are they using 30-year-old technology that burns more oil than more modern engines, but the maintenance costs to keep them running rises every year.” Mr Higgins said he received an alert every time any one of Belco’s 17 engines was not working. Typically this would happen between five and eight times per day. He said the people maintaining the engines — some of whom are younger than the engines themselves — did a “remarkable job” keeping them going. In 2011, Belco had applied for a rate rise that it said would have enabled it to finance a new $70 million North Power Plant to replace the oldest of its generators, which are now more than 30 years old, but the application was turned down by Government. Mr Higgins said the new engines would have paid for themselves in the space of four years through savings on maintenance costs and better fuel efficiency. The company had said at the time that the result of putting off the upgrade would be higher maintenance costs and lower reliability — and that was how things had turned out, he added. Shutting down engines permanently with the drop-off in demand had been considered to further cut costs, but this would increase the risk of supply interruptions — something Belco considered unacceptable, Mr Higgins added. Some transmission lines were more than 50 years old, he added. “Three times last year we had to dig up Cedar Avenue because an underground transmission line failed. Replacing some of that infrastructure would help to bring down those high maintenance costs,” he said. Labour costs, which include employee and retiree benefits, made up 30 per cent of expenses, he said, and had fallen as a percentage of total expenses in recent years. Labour unions had helped by agreeing to a two-year pay freeze. Depreciation made up 15 per cent, maintenance and engine overhauls 12 per cent. A further 25 per cent are fuel costs. Although most fuel costs are accounted for separately in the fuel adjustment revenue, the first $30 a barrel is listed as a Belco expense and is paid for by the customer as part of the base rate tariff. Asked about the scope for further cuts, Mr Higgins said: “You have to make sage decisions about cutting costs in a utility because you do want to meet the load whenever it comes. “If you start cutting back, then when the economy comes back you won’t be ready for it and if we simultaneously have an oil blowout again, we’ll be right back in the soup and asking ourselves, ‘Why didn’t we do something about it when we could have?’”
June 4. Struggling families cannot afford even a modest increase in their Belco rates, according to social activist Sheelagh Cooper. The Coalition for the Protection of Children head gave guarded support to Belco’s announcement that it might raise its rates — but was adamant that residents on the bottom tier were already pushed as far as they could go. Yesterday’s announcement from the utility company also appeared to go against an assurance from Government, made three months ago, that bills would not rise despite a fuel charge in the Budget. “Belco’s initiative to lower rates for people who use less electricity was a good thing,” Ms Cooper said, referring to a proposal presented a year ago that offered a drop in rates for those who consumed the least power. “It would be a good thing if they followed the same line of thinking if they raise the rates — if they hold the line on the smaller users. Those are the consumers who can’t sustain any kind of hike. Nobody likes to see rates increase, but certainly not this portion of the population. We get calls daily from people whose lights have been turned off or are about to be turned off. This portion of the population is finding it harder and harder to make ends meet. Larger users of electricity can certainly afford it.” A year ago, Belco proposed that families who used between zero and 15 kilowatt hours (kWh) per day — about 44 per cent of the company’s residential customers — could expect to save between 5 and 21 per cent from their overall bill under a new pricing regime that would have the largest consumers paying more. However, under the new proposed residential tariffs, those same consumers — with a total monthly bill of about 300 kWh — would get a 7.3 per cent rise in their bills, with their monthly charges jumping from $107 to $115. The bigger consumers of 1,500 kWh would see an increase in their bills of more than double that amount: 15.6 per cent, or from $610 a month to $706, meaning that the biggest hit would go to those using the most power. Grant Gibbons, the Minister for Economic Development, said last night that he was limited in his ability to comment on the proposal, since it lay with the independent Energy Commission to make its recommendation on accepting all or part of Belco’s tariff increases, or turning the plan down. That organization would consider the implications of Belco’s offer and give its verdict on whether they were justified. “Belco have a right of appeal to the minister under the Act,” Dr Gibbons said. “If they’re unhappy with the decision there is an appeal to me. For that reason I would just as soon not comment.” In March Dr Gibbons issued a statement to residents that a new fuel charge added to the 2015-16 Budget would be offset by the fall in oil prices. At that time, Belco said that the cost of electricity could drop even more if fuel prices stayed down. “That was for the fuel adjustment rate, the part that’s directly connected to the price per barrel,” Dr Gibbons said last night. “The fact of the matter is that the fuel adjustment rate has come down, but the Commission is going to have to study this particular submission to see what the overall impact would be.
2015. June 2. To mark the start of hurricane season, the Bermuda Electric Light Company yesterday reminded the public to start preparing well in advance. “Please prepare now for stormy weather, ensuring that you have all necessary supplies and that you have made plans to keep your loved ones safe,” a post on social media advised. It added that trees should be trimmed back at least 10ft away from power lines and that the public should make sure that generators are operational. “At Belco, we start our preparations in the spring; including getting in extra materials and ensuring that everyone is up to speed on emergency procedures. Please don’t wait until a storm is approaching. Be prepared for the 2015 hurricane season,” the post concluded. Hurricane season began yesterday and runs through to November 30. While forecasts suggest a quieter than average season, the Bermuda Weather Service last week also urged the public to stay on their toes." Last season was correctly forecast to be less active than average, however, I don’t think anyone would say it was a quiet season for Bermuda,” James Dodgson, the deputy director of the Bermuda Weather Service, told The Royal Gazette. “Whether the forecast is active or inactive, it only takes one tropical storm or hurricane to make it a busy season for Bermuda.” Mr Dodgson urged the public to keep regular tabs on the forecast and warnings, and when a warning is issued, to carry out their tropical storm/hurricane preparedness plan.
2015. June 2. Ascendant Group Ltd’s chairman Peter Durhager yesterday revealed that the firm had commissioned an independent investigation into whether the company’s chief executive officer had a conflict of interests in also being chairman of a US natural gas company. Mr Durhager, through a spokeswoman, said that the study, which was conducted by former Supreme Court Justice Geoff Bell, concluded that there was no conflict of interests in Walter Higgins’ two roles. The Ascendant chairman made the comment in response to a question from this newspaper, after concerned shareholders suggested that Mr Higgins’ role as chairman of natural gas company South Jersey Industries was a conflict, given Ascendant’s proposal to change its primary fuel to natural gas. Mr Durhager added that the Ascendant board is 100 per cent behind Mr Higgins. Mr Higgins himself responded to other concerns of the group of shareholders, all former Belco managers. Ascendant’s Integrated Resource Plan (IRP) proposes a conversion to natural gas (methane) as a primary generating fuel, but he added that alternatives such as propane, butane and ethane had been explored, as well as renewables which also feature in the IRP. He said the IRP process, mandated by law in many countries, was new to Bermuda, and stressed Belco’s plans could not be acted on before approval by the Energy Commission and consultation with the public. “What we’re trying to do is to come up with the lowest-cost way of providing a reliable electricity supply, while also meeting policy goals, such as more use of renewables. If there are people who think we’re on the wrong path with LNG, they will have the chance to say that and to give their own input. After the public have their input, the Government will decide what is the right path for the community.” Mr Higgins said the lack of “any other business” on the agenda did not mean shareholders at Friday’s AGM would not have a chance to speak. “We will stay there and answer questions as long as shareholders want to ask them,” Mr Higgins said. The reason “any other business” was not on the agenda was in the interest of shareholders not present at the meeting, he said. If a matter not on the agenda was voted upon at the AGM, then that would effectively disenfranchise proxy voters who could only vote on matters that had been listed, Mr Higgins said. “The idea that a shareholder can raise and issue at the meeting and ask for a vote to happen is not good corporate governance and it’s not allowed by our by-laws,” the CEO added. On directors’ remuneration, Mr Higgins said directors were compensated with a combination of cash and shares — so when Ascendant’s dividend was slashed they suffered financially along with other shareholders. Directors had not had a remuneration increase over at least the past two years, Mr Higgins said, adding that no cut was planned. The amount board members received was based on what comparable Bermuda companies paid, with an eye on retaining the best and brightest people possible to oversee the company, he added. As for revealing remuneration to individual directors, Mr Higgins said: “Other companies do not divulge it, it’s not considered best practice and it’s not a requirement of a Bermuda company — so our company is not inclined to do that.”
2015. June 2. A group of Ascendant Group Ltd shareholders intends to raise concerns about the direction in which the company is headed at Friday’s annual general meeting. The five are all former managers at Belco, a subsidiary of Ascendant, and they believe the electricity utility is committing itself to using natural gas as a fuel — at a conversion investment cost in the hundreds of millions of dollars — without properly exploring alternatives. The group claims that Ascendant chairman and chief executive officer Walter Higgins has a conflict of interests in that he is chairman of South Jersey Industries, a Pennsylvania-based group that has interests in the Marcellus shale natural gas fields. And the disgruntled shareholders will also demand information on directors’ remuneration in the belief that board members have not suffered financially, while the shareholders that the directors represent have seen their dividends fall by nearly four-fifths over the past decade. Ascendant responded to these concerns yesterday. Ron Lucas, Belco’s former human resources senior manager and one of the group, said in an interview: “We’re a group of shareholders objecting to the way the company is being run. We’re only interested in seeing the company back in good stead. And we’re more concerned about the future of the Island than Belco, because what’s right for Bermuda will be right for Belco in the end.” Another member of the group, Rod Holloway, Belco’s former manager of common services, said it was critical that a review of the options for the future of the Island’s electricity supply was carried out — especially given the plunge in the global price of crude oil over the past year that had significantly changed the arithmetic around the choice of fuel for the future. “In the past at Belco, we always used to look to use an outside consultant to add perspective,” Mr Holloway said. The group are concerned that the agenda for Friday’s AGM does not include the item “any other business” — something they say has traditionally been included in the past to give shareholders an opportunity to air their opinions. Mr Lucas wrote to Ascendant company secretary Cheryl-Ann Mapp to request that “any other business” and “directors’ remuneration” be included on the agenda. In an e-mail, dated May 21, Mr Lucas warned that if these items were not added he would inform the press that “in my opinion and the opinion of others the Board is deliberately suppressing the voice of shareholders”. Ms Mapp replied that directors’ remuneration was governed by company by-laws and was “not the remit of shareholders”, while “any other business” did not appear because “the Notice should contain all the business to be considered” at the AGM. That the board intended to suppress the voice of shareholders was “wholly untrue and unwarranted”, Ms Mapp added. Mr Lucas wrote back that the AGM was “perhaps the one opportunity each year for individual shareholders to ask questions of the Directors related to company performance and actions which on this occasion the Agenda denies.” Mr Lucas said Mr Higgins had called him personally to reassure him that he would get an opportunity to ask questions at the AGM. Shares of Bermuda Stock Exchange-listed Ascendant have collapsed from $42.50 to $5 over the past ten years. Over the same period the quarterly dividend payout has plunged from 39 cents per share to eight cents. Last year, the Ascendant board decided to slash the quarterly dividend from 21 cents to eight cents, given diminishing sales and profits. Mr Lucas believes the directors’ remuneration should reflect this. “The dividend has been cut in half, so the directors’ remuneration should also be cut in half,” Mr Lucas said. “That is what we wanted to propose.” Ascendant last month announced profits of $5.9 million for 2014, generating a return on equity that the company described as “unacceptably low”, after years of declining electricity sales due to a declining population and a struggling economy. And the company also revealed it will request permission from energy regulators to raise electricity rates. In the coming weeks, Ascendant will also submit its Integrated Resource Plan to Government outlining its views on the future of Bermuda electricity supply, with the centerpiece being a plan to switch from fuel oil to natural gas as a principal fuel. This would involve building a new terminal to receive liquefied natural gas (LNG) shipped in from overseas, where the cooled and pressurized liquid would be regasified before being sent via pipeline to Belco’s Pembroke generating plant. Most of the 17 engines now burning oil to generate electricity would also be converted to burn natural gas. The group, which includes an energy expert and engineer, agrees with Mr Higgins that the need for Belco to replace ageing generators is urgent. But they believe the company is underestimating the cost of conversion to LNG. In an interview with The Royal Gazette last month, Mr Higgins estimated a “ballpark figure” of $170 million to get Belco ready to burn LNG. The group estimates the necessary investment would be more than $250 million. “Who is going to invest that amount of money in a company that is making only about $5 million in profit?” Mr Lucas asked. There were two probable solutions, he said. Either a loan from an LNG supplier in return for a long-term contract of up to 30 years, or a takeover of Belco by an LNG supplier. This theory led them to be concerned about Mr Higgins’ alleged conflict of interests as chairman of South Jersey Industries. “Walter Higgins is now chairman of a huge LNG holding company and so his interests are primarily related to promoting LNG and not looking at the best solutions for Ascendant and Belco,” the group stated. Bermuda needed to be aware of environmental and safety concerns surrounding LNG, they added. These included the potential for “potentially catastrophic” explosions, terrorist attacks and the requirement for exclusion zones around regasification plants that “would not be possible on land in Bermuda”. While they agree that natural gas was “the environmentally cleanest fuel”, they said there was potential for methane leaks more environmentally damaging than carbon dioxide produced from burning fossil fuels. The group added that with fuel development and energy price changes over the past two years, there was a need for a study into the best short- and long-term solutions for the Island by an independent engineering consultant with expertise in electricity generation for smaller communities. Mr Lucas pointed out that the US Virgin Islands had chosen liquid petroleum gas (LPG) after a review. Regardless of the long term, urgent action is needed now to refurbish Belco’s generator fleet, according to the group, which argues that Ascendant needs to make a $20 million annual profit just to replace and refurbish its engines and infrastructure. “If Bermuda’s economy picks up to the extent that electricity demand is where it was a few years ago, then we would be getting brownouts,” Mr Lucas said. “Belco urgently needs two new engines now and two more in the next few years. This will cost about $80 million for four new engines and a new building to house them.”
2015. May 21. Belco could be burning natural gas instead of heavy oil fuel within four years, if energy regulators back the utility’s plans to change its principal electricity-generating fuel. That’s the view of Walter Higgins, the chief executive officer of Ascendant Group Ltd, Belco’s parent company, who is preparing to submit plans for the future of the Island’s electricity supply to the Energy Commission within the coming weeks. Mr Higgins estimated that the infrastructure and plant investment needed to achieve the conversion to natural gas would cost in the region of $170 million. The plan envisions liquefied natural gas being shipped in from the US, delivered to a purpose-built terminal, where it could be stored and regasified, and delivered via a pipeline to Belco’s Pembroke power plant for burning. The details are contained in Belco’s ‘Integrated Resource Plan’ (IRP) which Mr Higgins hoped to have ready to present to regulators by June or July. As well as conversion to natural gas, the plan includes an expanded role for solar energy and an energy conservation programme. Mr Higgins said the company would seek permission to carry out in-depth studies in order to make accurate estimates of the impact on electricity prices. “It’ll take us about eight months of serious, detailed engineering before we can go back to the regulators and say ‘here’s what it’s going to cost and here’s what the effect on the customers’ rates would be. If they say ‘go’, it’s about two years from there to convert to natural gas — so about 2019, probably.” The purpose of the IRP is to propose optimal solutions for delivering a reasonably priced and reliable electricity supply, while also working towards policy goals, such as reducing emissions and increasing use of renewable energy. Mr Higgins said conversion to natural gas would be worth the investment for the Island. "Thanks to advances in gas extraction techniques, notably ‘fracking’ which allows access to gas deposits trapped in subterranean rocks, the US has an abundance of natural gas reserves. While energy markets tend to be volatile, the glut of ‘shale gas’ has created a reliable supply and a relatively stable market for natural gas. The fuel adjustment charge on Belco bills, which fluctuates with fuel prices, would be less prone to violent swings with natural gas. Belco has 17 generators, of which five are combustion turbines and the rest are reciprocating engines that work like diesel engines. Most of these can be converted to burn natural gas, but not the oldest ones — which are close to 30 years old and are already operating inefficiently. Gas also burns more cleanly. “The conversion will solve emission problems — both the things you see coming out of the stacks today and carbon emissions. We can reduce the carbon emissions from our plant by about 30 per cent by converting to natural gas. In the world of the future, cutting carbon emissions won’t be a matter of being good, but rather mandatory. That’s coming, it’s just a matter of when. Solar energy can play a growing role in the electricity supply, the IRP will argue. Bermuda’s a good candidate to deploy solar energy in a couple of ways. One is rooftop solar thermal to heat the hot water in your house. There are about 10,000 good candidate rooftops in Bermuda (out of a total of a bout 36,000 rooftops). They face south and are not shielded by trees or other buildings. One drawback of solar is the difficulty in storing the electricity produced for use when the sun is not shining. In the case of water heaters, however, the heat is stored in the water. There is also the potential for “utility-scale” solar in Bermuda, thanks to a fall in the price of solar panel technology that makes it more economically viable. The third leg of the IRP is energy conservation, an area in which there is much room for improvement. People are still not doing much energy conservation. The building codes are not as strict as they might be, and existing housing stock is generally not built to good energy efficiency standards, even for this mild climate. With utility-sponsored energy conservation, we could go the house, wrap the water heater, tint the windows, insulate the attic — that becomes part of the resource that’s helping everybody’s bill go down, because it means we don’t have to burn as much oil or build as many engines.” Another proposal in the IRP features advanced metering systems that could give both Belco and its customers real-time information on electricity usage.
2015. May 16. The Bermuda Electric Light Company was awarded a $4.5 million government contract to replace the street lights throughout Bermuda with light-emitting diodes, or LED, luminaires. Among the advantages of LEDs are lower energy consumption and a longer lifetime. A government spokesman explained the Island-wide initiative, which was contracted to Belco by the Ministry of Public Works, will replace approximately 4000 high pressure sodium street lights with LED luminaires, which includes all the lights they maintain. The street light replacement project does not include the lights maintained by Wedco. The spokesperson said: “In December 2013 a pilot study of LED lighting was carried out on Trimingham Road between the two roundabouts. This involved 14 LED luminaires which also featured wireless control communication. “This pilot study demonstrated the performance of this technology in the local environment. Basically LEDs offer significantly reduced energy consumption — figures around 50 per cent are realistic — which means reduced energy cost. Also, (they mean) reduced environmental emissions, reduced maintenance costs and improved lighting levels.”
2015. May 12. Belco is preparing to ask energy regulators for permission to raise its electricity prices. The imminent rate filing to the Energy Commission to change basic tariffs comes after Belco’s parent company Ascendant Group Ltd announced a fifth consecutive year of falling electricity sales. This afternoon Ascendant reported full-year earnings of $5.9 million in 2014, up $1 million from 2013. The company said the increase was mainly due to accounting adjustments on certain one-off items occurring in 2013. Ascendant also announced that it will submit plans to Government this year to convert its infrastructure to change Belco’s primary fuel to natural gas instead of fuel oil. The ‘Integrated Resource Plan’ (IRP) also includes proposals for “utility-scale solar renewable energy systems” to help diversify the Island’s energy sources and energy efficiency programmes. Ascendant estimated that implementation of these plans would create 150 jobs for Bermudians. In its earnings statement, Ascendant said Belco’s return on equity was “unacceptably low” because revenues had slumped with declining electricity demand, while cash flows were strained under increasing operating costs and capital outlays needed to maintain its aging generators. “Belco will shortly be submitting a rate filing to Bermuda’s Energy Commission to adjust tariffs in order to achieve an acceptable rate of return that will allow it to continue to provide reliable service and attract investment for needed electricity infrastructure,” Ascendant stated in its earnings commentary. For many electricity bills have fallen in recent months, thanks to a slump in the global price of crude oil which has reduced the cost of the fuel used to power Belco’s generators. This has translated into a sharp fall in the fuel adjustment charge, which this month was cut to 11.5 cents per kWh, 26 per cent lower than it was in January 2014. Ascendant’s 2014 annual report shows that Belco’s electricity sales totaled 577.4 kilowatt hours (kWh) in 2014, after demand fell from residential and commercial customers alike. This marks an 11.25 per cent drop since 2010 when Belco sold 650.6 million kWh. Ascendant Group chief executive officer Walter Higgins said: “Ascendant Group continues to grapple with the effects of Bermuda’s prolonged economic recession, rising health care costs, aging electricity infrastructure and increased competition across all lines of business. “With the exception of the slight increase in net earnings in 2014, due mostly to accounting adjustments, Ascendant Group has experienced eight years of generally declining net earnings since 2005 when the Company reported $28.5 million, compared to the current 2014 net earnings of $5.9 million. “The weakened economy and a declining local population have negatively impacted electricity sales, as well as revenues from the sale of goods and services provided by the company’s other operations during the year.” Ascendant said the decline in electricity consumption was driven primarily by “the departure of both Bermudians and the non-Bermuda workforce as international companies consolidated operations outside of Bermuda or reduced the level of staffing on the Island. “In addition, many customers are voluntarily conserving and reducing their electric energy consumption, adding to the downward pressure on sales.” Last June Ascendant slashed the quarterly dividend it pays to shareholders by more than half to 35 cents per share in order to save capital. The Bermuda Stock Exchange-listed company’s share price fell by almost half last year to close 2014 at $5.40 — less than a fifth of its book value, which was calculated as $30.59 per share. The company was also tested by the visit of hurricanes Fay and Gonzalo in the space of a week last October. Ascendant said it spent $2.9 million restoring the network after the storms. Belco replaced 80 transformers, 228 poles and 4.25 miles of cables as a result of the hurricanes. Ascendant Group’s total operating expenses decreased $4.6 million in 2014 to $238.9 million, thanks to the fall in fuel costs — 49 per cent of the company’s total expenses — and a $1.2 million decrease in the cost of its defined benefit pension plan. Ascendant added: “The company is reviewing a number of options to reduce overall compensation and benefits costs while ensuring an optimal number of skilled, competent staff to meet operational requirements and maximize productivity in a safe, secure working environment.”
2015. March 13. The construction of Bermuda’s first solar farm near the airport is still potentially on the cards, Economic Development Minister Grant Gibbons has revealed. Dr Gibbons told the House of Assembly on Wednesday that the Department of Energy would develop a “request for proposal” for a utility-scale solar photovoltaic development at “the finger” at LF Wade International Airport. The minister also maintained that the regulatory reform project would remain a priority for the department in the upcoming fiscal year. “Developing new energy options requires a new framework of policy, legislation, and regulation. The current framework, developed when liquid fossil fuels were the only viable option, lacks the flexibility to integrate new options. The updated framework must also ensure that the benefits of introducing new technologies into Bermuda are shared by the consumers, the utility and the Government.” Dr Gibbons told the House that the Department of Energy’s budget for the upcoming year would be $988,000. He said the decrease of $52,000 from the previous fiscal year was attributable to several factors, most notably the termination of the Solar Rebate Initiative. “There have been over 200 photovoltaic systems installed, for an installed capacity of approximately one megawatt. There have also been approximately 100 solar thermal systems installed during this time. The department has paid out over $540,000 in rebates for both initiatives over the last two years. It is therefore safe to say that these rebates have achieved their goal of encouraging the uptake of residential-scale renewable energy systems, with the added benefit of creating construction jobs in the economy.” Dr Gibbons said the department was keen to co-host another Energy Summit this year and would focus on creating a transmission and distribution licensing framework, so that the rules of engagement with Belco by independent power producers became more well- defined. In the coming financial year, the department will also attempt to create a licensing framework for utility-scale renewable energy facilities, review the duty rates on fuels to introduce incentives for the use of high-energy, low-carbon emitting technologies, and explore the viability of LNG as an alternative energy source.
2015. February 27. The average electricity bill could rise by as much as $8 a month as a result of Governments hike in fuel duty, according to Belco. The company says the fuel increase of five cents a litre announced in the Budget will mean the customs duty it pays on fuel will rise from $15 a barrel to $23. The power provider says this will add approximately $8 to the average monthly electricity bill for householders on the Island. The increase in fuel duty, which is aimed at tackling Bermuda's growing debt, will take effect from the beginning of April. Finance Minister Bob Richards stated during his Budget speech that the tax hike would raise about $9.6 million in extra revenue for Government. A spokeswoman for Belco told The Royal Gazette: "Once passed by the legislature, the five cent per litre increase in customs duty, announced in the Budget, will increase the customs duty Belco pays on fuel oil from $15.10 per barrel to $23.05 per barrel. This will add approximately $8 to the average monthly electricity bill, based on average usage of 600 kilowatts hours per month." The rise in the cost of fuel has already prompted concerns from taxi drivers who fear that the hike will affect their livelihoods. Family charities are concerned that the rise in electricity bills could also have a major impact on families already struggling in tough economic times. Martha Dismont, executive director of support charity Family Centre, told The Royal Gazette: "If it equates to an $8 increase in electricity costs, that is an added problem for families already struggling to make ends meet. We are at such a critical state in our community that an increase of $8 could make some families having to decide between paying the electricity bill and feeding the family. There is a percentage of our population barely hanging on by a thread as a result of loss of jobs, loss of family support, and/or being in the rear of the line because of having less skills than those more recently made redundant. We have a problem that is not going away any time soon, and we need more creative solutions."
2015. January 5. A series of think tanks aimed at cutting the cost of power is to be held in the New Year, Ascendant has revealed in an end-of-year letter to shareholders. Walter Higgins, CEO of the parent company of electricity firm Belco, announced the moves and said that in the meantime his company continues to develop and refine a comprehensive integrated resource plan (IRP) that proposes a diverse portfolio of energy solutions, initiatives to bring down costs to the consumer and job creation associated with implementing the plan. A variety of approaches designed to cut costs and pollution were being looked at including replacing the current oil-burning plant in Pembroke. The plan recommends reducing costs with energy efficiency and conservation initiatives, extensive renewable energy deployment and a transition to an alternative fuel, likely to be liquefied natural gas (LNG) to achieve lower cost energy. Workshops would follow an energy summit, held in November last year, the first of its kind in Bermuda and which brought together experts from Bermuda and overseas. Mr Higgins quoted Minister of Education and Economic Development Dr Grant Gibbons' opening address, where he said that energy reform was vital to economic recovery and could even accelerate the pace. "This is a statement that is even more profound given what is required to prepare for the America's Cup. Ascendant's success is directly linked to Bermuda's growth, stability and prosperity and we will work closely with all stakeholders to achieve the best outcomes. The Cup, which will see a series of events starting in the fall and climaxing with the finals in 2017, would boost the firm and Bermuda. Ascendant Group Ltd has given its commitment to the Bermuda Government and the America's Cup organizers that we will provide the required energy and infrastructure support to help make the America's Cup a great success. There is much to be done in preparation for the America's Cup, but Bermuda has a tradition of successfully rising to challenges." And he cited the firm's response to two hurricanes, Fay and Gonzalo, which hit the Island in a space of a week last October, including drafting in extra specialists from the Caribbean, and the speed at which normality was restored as an example of the Island's resilience. The letter also told shareholders that a dividend of 7.5 cents per share would be payable at the end of last year. Mr Higgins added that work continued to review its costs and that, starting from this year, the employee health insurance plan was being revised to reduce overall costs, while maintaining benefits and sustainable coverage. "The New Year will bring with it continued challenges, but also many more opportunities. We are looking forward to working with Government, stakeholders and the whole community in doing our part to deliver on our commitments."
2014. December 22. As world oil prices fall, the Island is feeling the benefit with the price of gas now at its lowest since 2010, and power firm Belco also cutting its rates. Rubis last week set its gas price at $1.767 a litre, a 17.1 cent fall compared to November prices, while the price of diesel has gone down 14.8 cents to $1.602 a litre. Businesses and householders will soon feel more of the benefits of the lower oil prices when Belco cuts its fuel adjustment rate to 12 cents next month, which follows a December fall to 13 cents per kilowatt hour, down 4.5 cents compared to the November rate. A Belco spokeswoman said: "Belco endeavors to minimise the cost to the customer by negotiating the best possible prices, purchasing when the market is low, selecting the most economical fuel and maximizing plant efficiency." Rubis said its gas prices were at their lowest since February 2010, while the price of diesel has not been so cheap since Cup Match of the same year. The Belco spokeswoman said that the cost of fuel for the firm was the total of the price paid on the world market, plus tanker transportation to the Island and the standard Bermuda Customs duty of $15.10 a barrel. She added: "As the actual cost of fuel changes on the world market the fuel adjustment cost changes." The fuel adjustment rate is set every month by the Energy Commission, based on a calculation that includes the cost of fuel and projected usage, and starts with a base cost of $30 per barrel of fuel. The moves follow a plunge in the price of oil to below $60 a barrel, its lowest level in five years, although it rallied slightly on Friday, closing at $62.15 per barrel. OPEC, a group of the major oil producers, last month failed to agree on production cuts, largely because Saudi Arabia, OPEC�s biggest oil producer, opposed cuts in its own exports of crude. OPEC controls around 40 per cent of the world market in oil. Saudi petroleum minister Ali Naimi said that "a lack of cooperation by non-OPEC production nations, along with the spread of misinformation and speculators' greed" had contributed to the slump in the price of crude oil. Saudi Arabia, which has massive reserves of cash built up over years, is better able to weather lower prices, unlike non-OPEC nations like Russia and OPEC members Iran, Iraq and Venezuela, who need prices higher than the present levels to meet their budgets. Analysts said the bearish fundamental conditions of massive production and shrinking demand remain in place and are expected to continue in the first half of 2015. Macquarie Bank strategist Vikas Dwivedi said: "We continue to see further downside risk for Brent as the oversupply in the global market continues to grow."
2014. November 8. Bermuda’s power firms are to come under the control of the Regulatory Authority in an attempt to boost competition and promote alternative energy sources. The change was signaled in the Throne Speech, delivered by Governor George Fergusson yesterday. He said: “The Government, in keeping with its strategic goals to ensure a secure supply of energy for the Island and to reduce energy costs, fossil fuel dependency and greenhouse gas emissions, will use the year ahead to achieve regulatory reform and promote alternative energy use.” Mr Fergusson said a new Energy Act would transfer regulation from the Ministry of Education and Economic Development and the Energy Commission to the Regulatory Authority. “This will provide greater clarity and scope to the regulatory decision-making process, an increased level of competition between power producers, equitable interconnection in the grid and the development of a robust licensing regime,” he said, adding that Government will also this year call for proposals to turn the unused airport “finger” into a massive solar panel farm to provide renewable energy for Bermuda. He added that an Energy Summit, to be held next week, would discuss Bermuda’s “energy future, the reform of the energy regulatory environment, the diversification of Bermuda’s energy mix, including the introduction of liquefied natural gas and measures to address energy conservation and efficiency.”
2014. October 31. Lingering and widespread blackouts since Tropical Storm Fay 18 days ago, then a week later Hurricane Gonzalo, both of which caused massive blackouts for days and in some cases over two weeks, have prompted the question of why the Island’s power lines aren’t safely underground. But burying the network of distribution cables comes with its own steep costs, Belco responded — and, contrary to rumor, the utility company never requested a rate increase to put the system underground. The company estimates that the job would take a full decade, at an estimated cost of $375 million, that would force Belco to allocate costs across its customer case at an extra $87 each, per month, for ten years. That is up from the $250 million estimated in 2003, in the aftermath of Hurricane Fabian. A Belco spokeswoman told The Royal Gazette that 100 per cent of the company’s transmission system — the high voltage wires carrying power from the plant to its distribution network — already lie below ground. “Also, approximately half of the distribution system is underground, and new builds are typically done as underground — unless there is some reason that a property owner chooses to forego under grounding, such as cost or logistics,” she said. But for Belco to retroactively embed its above-ground system would present operational challenges along with an exorbitant cost — such as the difficulty of repairs. “Identifying, excavating, repairing and reinstating underground cables can be a time-consuming, labour-intensive process,” she said. “In addition, unless the entire Island is under grounded, a property owner’s under grounding is only going to work up to the first span of overhead lines in the distribution system. If there is a fault anywhere along the overhead spans between the customer and the Central Plant, the under- grounded customer will be without power. In addition, permission to go underground would require the consent of landowners and Government — and some locations on the Island might not be suitable for under- grounding."
2014. June 13. A proposal to drag Belco power generation into the 21st century could eventually cost half a billion dollars, the company said in an interview yesterday. It would include, in one of the first stages, an ambitious multiyear plan to begin mounting solar panels on Bermuda homes for hot water heaters — targeting 1000 a year. It would eventually, perhaps in the fifth year, also include the use of liquefied natural gas (LNG) fuel, removing the need for importing expensive oil. Belco uses a million barrels of oil a year, at an annual cost of $150 million — 55 percent of the total cost of running the utility — including $15 million in government duty. Belco’s parent company, Ascendant Group Limited, has an Integrated Resource Plan (IRP) that they say would generate a host of skilled and unskilled jobs, improve Bermuda’s balance of payments, reduce our carbon footprint, conserve energy, reduce pollution and contain household electricity costs. At present, there is no regulatory framework in Bermuda that would allow Ascendant’s plan to proceed. The current regulatory regime, suitable in the past, will have to be discarded for a far more sophisticated administration. And legislative changes are required before the appropriate framework will be put in place. Ascendant’s President and CEO Walter M Higgins, told Bermuda's The Royal Gazette newspaper, “The government is committed to putting the right regulatory regime in place. They indicated that commitment in the Throne Speech last year. They want a 21st century regime in place that is in line with world standards to regulate the electric utility. Standard regulation today, allowing for our substantial costs to be recovered and accumulated in certain ways, is exactly what lenders will look for when they consider lending money to us to do this work.” While the scheme to replace the current technology is pending, officials concede that they are not just faced with dated technology, but a facility that includes engines that are coming to the end of their useful life — and at least one which should have already been retired. While in an ideal world, the company should have begun upgrading years ago, they know there is no time like the present. Mr Higgins said, “The challenge Bermuda faces today is an ageing generating infrastructure with the engines near the end of their life, on average. Some of them are past the end of life. We have an oil burning infrastructure with all of the things that you can imagine are good and bad about that — highly transportable, highly dense, energy dense fuel. But it’s dirty. There is an issue if it is spilled. There’s sulphur in it, so there is a certain amount of pollution that comes out of those stacks. Soot can be a problem. We have to deal with it very carefully. And carbon dioxide, which is a world problem according to a lot of people, is also emitted in large quantities when you burn diesel or heavy oil like we do. And the third part of this is that every gallon of oil coming into this Island has to be paid for with money which is hard-earned by sending some product or service of value off the island. That must be one of the things that make (Finance Minister) Bob Richard’s life hard. We are about cash-outflow when the Minister is trying to get product outflow and cash inflow.”
2014. March 7. Belco has put forward a change to its facilities charge that would cut electricity bills for nearly half of its residential customers but more than one in four households would end up paying more. Those who consume the least electricity will benefit through a reduction in the facilities charge currently fixed at $33 per month for all customers while the largest consumers will see the charge rise to as much as $75 per month. Meanwhile, Walter Higgins, CEO of Ascendant Group, parent company of Belco, told The Royal Gazette a massive infrastructure project that would convert Bermuda's electricity generation system from using diesel fuel to natural gas would be presented to his company's board within a month. The work, which would cost in the region of $200 million, would enable Belco a subsidiary of Ascendant to use a fuel that is cheaper and cleaner than the diesel oil it currently burns and to lower electricity rates by an estimated 15 percent. Mr Higgins said investors were interested and the project to build a new terminal and pipeline, and to convert generators to burn natural gas would involve two to three years work from the point of gaining all necessary approvals. Belco said yesterday its proposal for a Graduated Facilities Charge based on electricity usage had been sent to the Energy Commission for consideration. The company stated: "The proposal is in response to the call to assist lower-income customers who struggle to meet monthly bills, during these difficult economic times. Those who use between zero and 15 kilowatt hours (kWh) per day around 44 percent of Belco's residential customers could expect to save between five and 21 percent from their overall bill, according to the company. However, the 28 percent of customers who use 25 kWh per day or more can expect to see their bills increase by nearly four percent, while the remaining 28 percent of customers will see no change to the charge. The facilities charge will be calculated according to the customers electricity consumption over the previous 12 months. This will be reassessed monthly, giving consumers the opportunity to fall into a lower bracket for the charge if they use less electricity. Mr Higgins said the proposal meant those who made greatest use of the system would pay more. He added that the burden added to larger, wealthier consumers, would be outweighed by the burden removed from the shoulders of low or fixed-income customers who tended to use the least electricity. Belco received sharp criticism from Finance Minister Bob Richards in his Budget statement last month, when he said claimed the company's inefficiency is eroding Bermudas competitive position and the high cost of electricity was a great burden for the Bermudian people whose buying power is reduced due to the high cost of just keeping the lights on. But yesterday, Belco's move was welcomed by Education and Economic Development Minister Grant Gibbons whose department has been in talks with Belco on pricing issues. "We believe that if approved, this proposal will provide some helpful cost relief for those residential customers who are low users of electricity and who tend to be seniors, as well as families and individuals in the lower income brackets. It would be premature to comment further because it is the Energy Commission who must consider and rule on the submission by Belco. The goal is to lower the cost of energy for all individuals, businesses and organisations while maintaining the reliability that we have come to expect in our energy supply."
How Belco's proposed Graduated Facilities Charge would impact customers divided by electricity usage levels:
Tier 1: 0-10 kWh per day facilities charge goes from $33 to $15 21.1 percent reduction in overall bill (26% of customers)
Tier 2: 10-15 kWh per day $33 to $25 5 percent reduction (18 percent)
Tier 3: 15-25 kWh per day $33 Unchanged NO CHANGE (28 percent)
Tier 4: 25-50 kWh per day $33 to $49.50 3.8 percent increase (22 percent)Tier 5: 50+ kWh per day $33 to $75 3.9 percent increase (six percent).
2013. December 27. Solar energy firms have called for power company Belco to adopt a Caymans-style agreement to buy back excess power generated by the sun from commercial generators. A source close to the Bermuda Sustainable Energy Association said it was difficult to understand why there has been such intransigence in formulating and agreeing the necessary interconnection and power purchase agreements her in Bermuda, especially considering that there are numerous agreements already in existence all over the world representing all sizes of jurisdictions which can be used as a model. "There is absolutely no requirement for Bermuda to reinvent the wheel we simply need to select the best proven models and get them implemented without any further delay. An agreement between Grand Caymans Caribbean Utilities Co and commercial users had been in place since early 2011, while Bermuda has yet to introduce a policy and a buy-back tariff." Belco does buy back power from domestic solar power plants under an agreement thrashed out in 2010 but a proposed agreement has been with the Department of Energy's Energy Commission since May without a decision on how to implement a buy back scheme from large-scale commercial solar power users. The source said there are many geographic and demographic similarities between Bermuda and Grand Cayman as well as comparable scale in terms of power generation, customer base and pricing per kilowatt hour. Cayman has adopted a feed in tariff model for both residential and commercial customers that has been in place since February 2011. A feed in tariff system defines the rate at which power is purchased by the utility company from the residential or commercial customer and guarantees the term of the agreement, usually 20-25 years, to allow the owner of the solar grid to get an assured return on investment. The Caymans agreement on interconnection and power purchase is only eight pages long, while the domestic buy back agreement in Bermuda runs to more than twice that length. The source added that Government had set a target in the 2011 White Paper on Energy of 20 percent of energy to come from renewable sources by 2020. However, the growth of solar electric photo voltaic systems in Bermuda has been severely hampered by the lack of commercial interconnection and power purchase agreements. The Royal Gazette reported in October that large scale solar systems, including Gorham's hardware store, were already supplying energy to the Belco network, which is then sold on, but not receiving payment for it. The source said obviously, this arrangement is beneficial to Belco but provides no incentive for the investment in commercial solar photo voltaic systems as evidenced by the very low growth in commercial installations. Belco referred requests for comment to the Energy Commission. A spokeswoman for the Ministry of Education and Economic Development said the Ministry recognizes the importance of developing fair and equitable interconnection agreements as a basis for the further expansion of solar and other alternative energy production in Bermuda. The Bermuda Energy Working Group which was established earlier this year has been working diligently for some time and is very near to proposing a recommended interconnection agreement. With regard to the interconnection agreements, the challenges are in the technical requirements and the cost recovery mechanism for any amounts paid. The primary concerns are the purchase price, but it is also the quality of power, intermittency, the safety of the systems, and the fairness of pricing not only in terms of what the utility will pay for power produced, but also how that cost is then absorbed by the rate base. This must be done so that it is sustainable, safe, and equitable to all rate payers, not just to those who are producing power. This must be done in close collaboration with the industry stakeholders, power producers, the Department of Energy and the Energy Commission. The process is complex, and it must be done correctly to avoid risk to the entire grid, or inequitable subsidies.
2013. November 22. A green energy firm is to lease solar panels to homeowners, a first for Bermuda. The offer from Alternative Energy Systems (AES) allows domestic users to get six solar panels installed with no upfront cost. AES CEO Tim Madeiros said: "In the past year, we've seen a phenomenal move to solar power in the residential market in Bermuda. To continue the momentum, AES is introducing this financial mechanism to further encourage the transition to solar technology among Bermuda residents. It is AES's goal to make solar technology accessible to everyone in Bermuda, which in turn will reduce the Islands reliance on expensive imported oil that significantly drives up our cost of living and operating a business. Those who sign up will get six SunPower 240w solar panels and a web-based monitoring kit, fully installed and commissioned, as well as Government and permit fees paid. The kit, which takes up 80 square feet of roof space, 2,200 kilowatt hours of power a year and comes with a 25-year guarantee. The monitoring kit allows uses to keep track of energy production from anywhere in the world using a computer or mobile device. Mr Madeiros declined to comment on leasing costs but he said: "The costs will be less than energy saved so the customer can realise an immediate savings on energy. This leasing programme offers a fresh, modern approach to the energy industry in Bermuda." AES, founded in 2008 by Mr Madeiros, a former Belco employee, has installed more solar panels than any other firm in Bermuda. For more information or to schedule a free site assessment visit, call AES on 505-0804 or e-mail email@example.com.
2013. November 9. Lower energy costs for consumers could be in the pipeline after Government pledged yesterday to open up the energy market to more competition. And the move could also make the Island more attractive to outside investors by lowering the cost of doing business in Bermuda. But a spokeswoman for BELCO which currently enjoys a monopoly position on electricity power urged caution in opening up the market. She said: "Movements toward competition in the electric utility industry need to be undertaken very thoughtfully to avoid bad outcomes for reliability and price." BELCO intends to continue to work very closely with Government on these matters. Delivering the Governments legislative programme for the new Parliamentary year in the Throne Speech, Governor George Fergusson said: "The high cost of energy is an important factor for residents and business alike and it is an issue that companies and developers consider when looking at the Island as a potential domicile." Following the successful launch of the Regulatory Authority in January of 2013, the Ministry of Economic Development will move the regulation of energy to this independent body. This move will involve changes to the Energy Act 2009 and the Regulatory Authority Act 2011. One of the aims of this initiative is to help lower the cost of energy for consumers. The Bermuda Energy Working Group has been formed and comprises a diverse group of energy professionals, independent engineers, non-governmental organisations and interested members of the public, working in collaboration to provide advice and guidance to the Department of Energy. One of their primary tasks is to develop equitable interconnection agreements for independent power producers to contribute to the production of electricity, a development that can lead to price competition, diversified energy production, increased use of renewable energy sources and the opportunity for lower-cost fuels such as natural gas. The BELCO spokeswoman said: BELCO is aware of all of these matters and is actively participating and working with Government on these topics.
2013. October 31. Commercial users of solar power already export electricity to power firm Belco, but they don't get paid for it, an industry expert said yesterday. Tim Madeiros boss of Alternative Energy Systems (AES) said he had been working for four years to thrash out a payment scheme for commercial solar power with Belco, but with no result. In the meantime, Belco has been free to sell on the power to other customers and it doesn't cost them a cent. Mr Madeiros said: "Not only is the excess energy exported by the businesses to Belco without compensation, but growth in the commercial solar energy industry overall being restricted because businesses that would consider a switch to renewable energy are reluctant to move forward until a final interconnection agreement with Belco has been established. I have been working for four years to try and thrash out an interconnection policy for commercial users with Belco long before the first commercial solar system was installed. Promises made by Belco that an agreement would be in place before the first system came online did not materialize." The Royal Gazette reported on Monday that Gorham's chief Rod Ferguson had asked both the Energy Commission and Belco for an explanation for the delay but had not received a reply. But a spokeswoman for Belco said the firm had kept members of his management up-to-date on progress. She added that solar panel installers had failed to respond to requests for comment on a draft agreement, which was submitted in May to the Energy Commission. AES has since installed 1,592 solar panels at three businesses home goods and building supply store Gorham's, drinks firm Goslings and Lindo's supermarket which produce a total of 392 kilowatts. But Mr Madeiros said: "These three businesses are closed on Sundays and public holidays, which means that for 62 days a year, they are exporting energy to Belco for free, that's two months of electricity a year." Clean energy produced by the renewable solar arrays owned by these businesses is received by Belco and is then onward sold by Belco through its grid to its retail customers. Mr Madeiros added that Belco's current rates are around 46c per kilowatt hour. Gorham's chairman Rod Ferguson, where solar power panels were installed two years ago, said he had been under the impression power generated at his firm had been wasted, not pumped into the Belco grid. He added: "They have been having it all this time and giving us diddly. Maybe what Belco needs to do once this agreement is in place is to look at a retroactive agreement. It means they are not using expensive fossil fuel if they are getting our electricity free." Belco said last week that it had submitted a proposal in May to the Energy Commission, which comes under the Ministry for Economic Development, but had yet to receive a response. Mr Ferguson said: "If Belco said look, we have not heard from you and because we feel an obligation to our larger customers, we want to roll this out now to appease them, then maybe the Energy Commission would be energized to complete its task. That would be a satisfactory result for us." But the Belco spokeswoman said: "In fact, those customers, such as Gorham's, who have installed commercial-sized solar renewable generating systems and connected them to Belco's grid have done so without any consultation, permission or approval from the utility. In every case, the affected commercial customers and the solar installers who built the systems did so in the full prior knowledge that until such time as a commercial interconnection mechanism is in place and approved by the Energy Commission, the customer could not be compensated. A solar system which is not properly installed could cause electrical back feed into Belco's electric system under certain circumstances, possibly endangering the safety of Belco line workers and the public. Similarly, arriving at the proper level of compensation ensures that the commercial customer with a solar installation is receiving fair compensation for the excess power they sell to the utility and, very importantly, is not being subsidized by all other Belco customers. Belco stands ready to implement the commercial solar interconnection agreement upon approval and has stated so many times. Mr Ferguson knows this and it is sad the he chooses now to misrepresent the truth." Government did not respond to requests for comment.
2013. October 4. A new tax on fuel - also see below - landed at the St Georges oil docks will raise funds necessary to protect the towns World Heritage site status, Government has claimed. MPs voted in favour of the Corporation of St George (UNESCO World Heritage Fund and Levy) Act 2013 in the early hours of yesterday morning. The bill puts a one quarter of a cent per litre tax levy on petroleum imports. Noting the historical significance of the town, Public Safety Minister Michael Dunkley said that Bermuda had long struggled to maintain its World heritage site to the standards set out in the criteria of the designation. He said that additional income raised from the tax will go straight to the Corporations coffers to maintain, develop and promote the World Heritage site. This will provide much needed funding to revitalize St George's into a centre that Bermuda can be proud off, Mr Dunkley said, adding that the towns potential as a major tourism attraction had not been exploited fully. The Minister noted that damage inflicted to the towns wharf by Hurricane Fabian ten years ago had still not been repaired. "It is acknowledged that any measure that results in even the slightest increase in cost creates an atmosphere of tension and impacts the consumer," Mr Dunkley said. "But this Government is not about to let the east end or anywhere else on the Island slide any further." Opposition MP Zane DeSilva said he support the bill in principle, but questioned the timing of the increase, claiming that the man on the street was hurting, while Independent MP Terry Lister asked what else the town could do to raise revenues. And Glenn Blakeney raised concerns about the long-term impact of an increase, questioning whether fuel cost increases might eventually result in a rise in public transport fares. But St Georges North MP Kenneth Bascome insisted that the PLP had dropped the ball by allowing the jewel of a town to fall into decline, and said that the funding would have long-term benefits. "It is going to help the Corporation of St Georges to increase their work crews and improve infrastructure, " he said.And Finance Minister Bob Richards concluded that the increase was negligible. "It's important to put this in perspective it is a 0.047 percent increase less than half of one tenth of one percent. It's negligible, it really is. And in terms of jobs, at the very least this measure will save jobs in St Georges."
2013. September 24. A new tax on oil imports will help protect and promote the world heritage site of St George’s. But oil importers yesterday reserved judgment on the one quarter of a cent per litre tax levy proposal until the details — including whether they can pass it on to consumers — are thrashed out with Government. David Rose, CEO of RUBiS, said: “It’s a levy on all fuel imports into Ferry Reach. We were given a heads-up it was coming and there is no date set for its implementation. And there will be further discussions between the oil companies on this. The oil importers and the Finance Ministers have to get together to discuss this. We can’t absorb any more costs in this financial climate. We as oil companies simply cannot pass on a tax. It’s the Ministry of Finance which allows for any new tax being recouped. It’s nothing at all to the consumer — but to the oil companies and BELCO it has an impact. As far as the oil companies and BELCO are concerned it’s an added cost — we’re in the same position as any other company in Bermuda. There has been declining demand for five or six years in a row and operating costs don’t go down.” Mr Rose was speaking after the bill, designed to raise funds on oil importers, including BELCO, was tabled in the House of Assembly. Mark Fields, country manager for ESSO, added: “I can’t comment on it at this point time. I’ll have to have my lawyers review it and see what it’s all about. I just looked at it and I think we can pass it on, but that’s just a cursory reading.” A spokeswoman for BELCO said: “We’re just trying to get some information on it at the moment — we’re trying to get some clarity. We’re looking into it to see what it means and we’re reserving comment until we do.” The cash raised will be used to create the “UNESCO World Heritage Fund”, which will be managed by the Corporation of St George’s. Finance Minister Bob Richards, who tabled the bill, said Government was still in the process of working out how much cash the move might raise. He added his Ministry had been in contact with oil importers. We’re still organizing the particulars and exact arrangements haven’t been finalized yet. We wanted to get the legislation through so we can get things going. They are pretty strapped for cash in St George’s, so I’m sure this will be welcome as far as they are concerned.” St George’s Mayor Garth Rothwell could not be contacted for comment yesterday. But Shadow Finance Minister David Burt said: “We all know that the old town needs help and the PLP supports maintaining the historic jewel of the Town of St. George. But we hope that the Government has thought this new tax hike through. It is likely that this new tax will be passed on to the consumer increasing the cost of living for hardworking families and small businesses at the worst possible time. We have to consider the knock-on effects of this plan. Not only will consumers face higher prices on their BELCO bills and to refuel their vehicles; but companies who will also see their costs rise are likely to increase the price of their goods and services. This can lead to an increase the price for food and essential services. We have learned that the Chamber of Commerce wasn’t consulted on the cruise ship gaming bill so we hope the same mistake hasn’t been made with this new tax. Rubis and Esso have hopefully been consulted and have been asked to hold off passing this new tax on to the consumer. If not this planned new tax is the wrong way forward and we urge the OBA to reconsider.”
2013. July 24. Power demand has been marginally higher so far this summer than it was a year ago. According to Belco figures, the peak load on July 19 was 112.6 megawatts, compared to 108.7 megawatts on the same date last year. However, while demand has been higher, a Belco spokeswoman said the cost of fuel on the world market had been lower. That translates into lower fuel charges this month when compared to the same period last year. The cost per kilowatt hour in July was 18 cents compared to 20.5 cents in July 2012. The spokeswoman encouraged customers to use energy efficiently, particularly during the hot summer season. “In years past, we have had peaks in July, August and in September. It really depends on Mother Nature and how high temperatures go. If temperatures cool down or it gets rainy, then we may already have had our peak for this summer.” Apart from that she said it’s impossible to predict. The company has also published ‘Understanding Your Bill’ advertisements this month following changes to the information that appears on Belco bills. The facilities charge is now listed as a separate item on monthly bills. It was previously embedded in other costs on the bill. “When we listed the facilities charge, some customers called with questions, so we decided to do some advertising to inform all customers of the change,” said the spokeswoman. “We are now adapting the print ad to become a flyer and bill stuffer. Our aim is to communicate clearly with customers about all of the elements of their bill, so they understand what they are paying for.”
2013. May 29. Government is exploring alternative forms of energy. Government's 2011 White Paper on Energy promised a “bright, exciting” future “not bound by fossil fuels” for Bermuda. But, two years on, the Island remains as reliant on them as ever and the cost of electricity keeps rising — a fact not lost on Economic Development Minister Grant Gibbons. “It's an issue that Government is very much looking forward to tackling,” he said. “There are a lot of pieces to addressing this challenge of high energy prices.” Dr Gibbons, whose Ministry includes the Department of Energy, said he understood the frustration felt by many about steep bills from Belco, the Island's only electricity provider. That discontent was voiced by his Cabinet colleague Bob Richards earlier this month, with the Finance Minister accusing Belco of taking advantage of its “monopoly power” by charging too much and reaping in the profits. Dr Gibbons said he appreciated where Mr Richards was coming from, particularly in light of rising prices, with the latest Consumer Price Index showing consumers paid three percent more for their electricity in March than in February. “It's been a long-term trend,” said the Minister, adding that he also appreciated the challenges faced by Belco. “Belco runs on diesel and fossil fuels to generate their electricity. Part of their problem is that a good portion of their pricing structure is based on the price of oil. We need to look at alternative ways. I know Belco is doing this.” The 2011 White Paper detailed how Bermuda became dependent on fossil fuels derived from oil when “they were cheap, easy to transport and could power a wide variety of machines.” It noted: “Unfortunately, as our use of fossil fuels has grown we have become increasingly aware of a range of issues related to their use and now realize our choice was short-sighted and is neither environmentally nor economically sustainable.” Dr Gibbons said the White Paper, which will be revised, was a little dated but contained a “lot of good things ... which we are now moving ahead on. Government is exploring energy production from wind and waves, along with combined heat and power plants (CHP), photovoltaic fuel panels and the real prospect of a solar farm at the old Navy munitions pier at the airport. We'd like to move forward to a point where we have different independent power producers feeding energy into the grid. Such projects involved a good deal of initial cost for the producers and they'd need the ability to sell power back to Belco. One of the areas that we are working on now, and we have got a number of people looking at it, is the whole issue of interconnect ness. At Tyne's Bay right now, some of the power generated by waste to energy is sold back to Belco at a certain rate. The rate is important and is known as a feed-in tariff. There is a need to find a rate that is fair and equitable. Government had to consider: “What are the interconnect ness arrangements? What are the feed-in tariffs? Is the grid capable of handling an intake of megawatts? Part of it, obviously, would be up to the grid [Belco] as to what they are going to require but part of it may be the responsibility of the independent power producer. There are issues there, but I think the point is we would like to be able to move towards a situation where we have other people, whether it be households [or others] generating energy. That's going to require some logistical and infrastructural changes, which we are going to have to work through and which Belco will have to be a key part of. It was highly likely that the new authority tasked with regulating the telecommunications industry, would also take on energy — with its remit to include setting feed-in tariffs. The authority would replace the Energy Commission. The structure is there and it's a full-time professional structure and much better suited to dealing with some of these areas. That's going to require legislation. During the course of this year, we'll be probably moving in that direction. The challenge that I think we have inherent with the Energy Commission is it does not have a lot of power. It doesn't have the teeth required to address the issues. We need a stronger regulatory structure and a lot of co-operative arrangements. Over the course of this summer we are working through policy direction and working with different stakeholders. Belco had many of its own proposals and was “pushing for alternatives as well. The company already has an interconnection policy which allows householders with small-scale renewable energy generation systems to feed excess power to the grid at the same rate they pay for power. And it has put together potential commercial agreements for larger-scale operations. The last Government, meanwhile, put rebates in place for those wanting to import alternative, and greener, means of producing power, such as solar water heating systems and solar photovoltaic electric generating sets. But such systems, which don't come cheap, had not really taken off here yet. The White Paper was very optimistic in terms of the take-up in terms of solar panels and solar thermal [energy] and it's been a much, much slower uptake than I think the writers of the White Paper anticipated. One of the reasons for that is cost. Photovoltaic panels is a very interesting solution for Bermuda, along with solar thermal energy, where the sun is used to generate hot water. CHP plants have been talked about for some time and could potentially prove effective in Bermuda. Instead of using 40 percent of your fuel, you can use 80 to 90 percent of it. You are using that to produce cold water and steam for other purposes. It's a much more efficient method of generating power. Natural gas, and how it could be used here, is also being seriously investigated. The United States, in the last few years, has become an almost independent producer of natural gas. They may be an exporter in the next few years. The price of natural gas has come down dramatically. Natural gas is a much cleaner fuel and has a lower carbon footprint. One of the abridging strategies here is to use possibly a source of liquefied or compressed natural gas as an alternative to bringing in lots of diesel. Belco is looking at it and there are other people looking at it as well. It's going to require a fair degree of investment, capital assets. You have to find a steady source of fuel to get it here. You need to turn it back into compressed natural gas — you have to deliquefy. It requires a certain amount of physical plant. We think at the very least this could provide better stability in terms of the price of fuel here, which is a key piece of the costs of electricity. It would also provide other opportunities. It's a cleaner, greener fuel in that sense. It's not as good as solar or wind but it could be a nice bridging technology, let's say for the next five or 20 years. I agree with Mr Richards that the cost of energy was a factor in Bermuda's ability to attract business here, including hotel projects. They [hotels] are very sensitive to it, because they have a very narrow operating margin. That's been an issue for many of the existing ones and ones considering Bermuda as well. Government was committed to finding cheaper electricity but it had to be sustainable. We can't have a situation where we have power outages because the wind drops for a few days or because we are in heavy cloud. It does require quite a bit of cooperation, working together and sorting through these problems.”
2013. May 22. Belco does not profit from the Fuel Adjustment Rate, and nothing parent company Ascendant Group is doing affects the price of electricity in Bermuda. This from Ascendant president and CEO Walt Higgins. The Fuel Adjustment Rate applies to the price Belco paid above a Price Commission-set $30 per barrel base rate. So, if Belco paid $130 per barrel $100 would be the amount upon which the Fuel Adjustment Rate is set. The cost is collected on a per kilowatt hour usage basis. The cost of fuel for Belco is thus made up of: The actual cost of the fuel purchased on the world market, refinery, plus transport, terminal processing fees and Bermuda Customs duty of $15.10 per barrel, which provides over $15 million in Government revenue, annually. Commenting on Ascendant’s recent steps to diversify, including formations and acquisitions, he said: “Nothing Ascendant is doing is affecting the price of electricity. “What we are doing is taking shareholder money and investing it in other business opportunities to offset the fact Belco is in a fourth year of seeing diminishing sales.” Belco saw electricity sales decrease for a third year in 2012, on fewer customers and reduced consumption; at the end of 2012 Belco had 35,770 customers compared to 35,862 in 2011. Kilowatt hours have declined from a high of 656.1 million in 2009, to 606.3 million in 2012., a drop of 49.8 million, or 7.6 percent. Ascendant noted in its annual report that fuel adjustment revenues increased $12.7 million to $104.1 million from $91.5 million in 2011, primarily due to a 12.6 percent increase in the average price of fuel, which for 2012 was approximately $135 per barrel as compared to $119.88 a barrel in 2011. The remainder of the increase was due to a higher rate paid for more kWh purchased from the Government’s Tynes Bay waste-to-energy incinerator plant as well as drop in overall fuel efficiencies, as aging plant required more time of service for maintenance. Mr Higgins said there will always be a fuel adjustment rate, it will just get bigger or smaller, based on the true cost of oil. As Ascendant explained, Belco applies to the Energy Commission each month to set the monthly Fuel Adjustment Rate, which covers the cost of fuel purchased to supply electricity. The Energy Commission sets the rate based on the price Belco paid for the fuel shipment. The Fuel Adjustment Rate will vary from month-to-month, up and down, dependent upon the price Belco paid for the fuel. The Fuel Adjustment Rates so far this year have been:
January 16.5 cents
February 17.5 cents
March 18 cents
April 18 cents
May 17 cents
Mr Higgins said he welcomes meeting with Finance Minister Bob Richards who has accused Belco of charging too much for electricity and has urged it to give some of its profits back to customers by lowering prices. Mr Richards charged the company was using its “monopoly power” to grow its business and pay dividends to its shareholders, while cash-strapped consumers suffered from its high charges.
2013. May 16. Bermuda could have imported liquefied natural gas as an alternative to costly oil in as little as three to five years if all falls into place. This from Ascendant Group president and CEO Walt Higgins, who says residents could see a savings of at least 15 percent on their electricity bills. “We are making terrific progress in the process of helping to bring the Island to a decision on the importation of natural gas,” said Mr Higgins, a US energy industry veteran. “The current wisdom now in Bermuda is we ought to be moving towards liquefied natural gas as our principal source of fuel for electricity generation in Bermuda.” But he stressed it will take a substantial investment of hundreds of millions of dollars in building infrastructure, facilities and even at least two dedicated LNG tankers to bring the liquefied natural gas to the Island from the US. Mr Higgins sees this being done in partnership with an experienced international company in the LNG industry. And he said hopefully Belco will be refitting and replacing power plant engines one day to burn imported natural gas and not imported oil. Mr Higgins said following a Government agreement of concept and process there are a number of steps that need to be taken including: A detailed feasibility study covering the financial, environmental, engineering, procurement and logistic aspects of the project; and a long-term natural gas purchase agreement including pipeline transport of the natural gas to a liquefaction and export facility, where the gas would be liquefied and loaded onto specially built ships. A liquefied natural gas terminal would need to be built in Bermuda and a pipeline from the terminal to Belco. Much of this work would take place simultaneously, Mr Higgins said. It is expected the initial feasibility study would take approximately 12 months, after which pending approvals development of the terminal would take upwards of 24 months, Mr Higgins said. He cautioned that making deals to import natural gas will be a challenging process, requiring the securing of pipelines and a facility in the US that can liquefy the gas before shipping, which will not be easy because of record demand right now for America’s supply of cheap, clean and abundant natural shale gas. “Everybody in the world wants to tap into the low prices of US shale gas supplies,” he said. The International Energy Agency (IEA) has predicted in a report this week that rising shale oil production will help meet most of the world's new oil demand in the next five years. The agency said that North America “set off a supply shock that is sending ripples throughout the world”. "The good news is that this is helping to ease a market that was relatively tight for several years," the agency said in the report. Oil traded near $103 a barrel this week, well below its peak of $147 back in 2008. Another benefit of natural gas is it emits about 50 percent less carbon dioxide than oil and coal.
2013. May 9. Finance Minister Bob Richards accused Belco of charging too much for electricity and urged it to give some of its profits back to customers by lowering prices. Mr Richards claimed the company was using its “monopoly power” to grow its business and pay dividends to its shareholders, while cash-strapped consumers suffered from its high charges. He said: “They are a private enterprise, they are entitled to make a profit, but when those profits are used to buy other businesses and, of course, they still have money left over to pay dividends, you say to yourself perhaps some of that profit could have been given back to customers Perhaps they shouldn’t be charging us what they are charging us.” Belco’s parent company Ascendant Group hit back at his comments, with a spokeswoman saying the cost of electricity here was primarily driven by the price of fuel oil on the global market. She said "electricity rates in Bermuda did not support diversification by Ascendant and it was using a combination of earnings from across its group of companies, as well as investor funds and debt, to expand. As for dividends, the spokeswoman said: “Investors in any business will only invest if they receive a fair return on their investments.” Economic Development Minister Grant Gibbons, meanwhile, said "my Cabinet colleague was simply voicing the frustration that many people feel about high energy costs” he had seen a willingness on Belco’s part to be involved with efforts to make energy more affordable. I think a lot of people see Belco as the enemy but I think we have to see them as part of the solution and they will need to be part of the solution. Dr Gibbons is responsible for the Department of Energy, as Economic Development Minister. He also stated that reducing energy costs was a priority for Government, with several alternatives to fossil fuel being explored for Bermuda. They include wind, wave, photovoltaic solar panels, solar thermal energy and combined heat and power plants. There is a “real prospect” of a solar farm being built on the old navy munitions pier at the airport — an area jutting into Castle Harbour sometimes referred to as the Finger. “We have a number of proposals where people are interested in putting in a solar farm down there. The idea is to cover that area with solar cells and use that to generate electricity, which is different to what Belco is generating in Pembroke. The issue of high energy costs is right across the board, whether you are an individual householder, a business or, in fact, Government. Our current budget for energy — which is not all Belco — is something in the order of $20 million a year so Government is invested in this as well. I think we all understand, because we are all paying.” Mr Richards said: “I think there is something intrinsically unbalanced about a company that has a monopoly using monopoly power to buy third-party companies. If they have that kind of money left over, and are still able to pay dividends, it says to me that we are paying too much money [for electricity]. “It’s a private enterprise, I understand that [but] because of the nature of it, it strays into public policy. I don’t know anywhere where power costs as much as it costs in Bermuda.” The One Bermuda Alliance MP recalled how the United Bermuda Party Government of the late 1990s “broke the monopoly” in the telecommunications industry, when he was Telecommunications Minister. And while he suggested it wasn’t “necessarily practical to talk about having another Belco in Bermuda”, it was important to have tougher regulation of the company. Their interests are not necessarily, as a company, in sync with the public interest. Our job as government is the public interest.” The Minister admitted he couldn’t “reel off solutions” for driving down energy costs but said there was a will within the new Government to find a way. “I’m just sort of laying down markers here insofar as my job as Finance Minister to oversee the Bermuda economy,” he said. “I believe that this is a critical factor in how we are competitive as a jurisdiction. I really do believe there are a list of reasons why Bermuda has become uncompetitive and has had four, going on five, years of economic contraction. On that list is the cost of doing business and the cost of living and fundamental to those costs is the cost of energy. I won’t stop talking about it and I won’t stop looking at ways to do something about it.” Shadow Economic Development Minister Glenn Blakeney said soaring energy costs were something the Progressive Labour Party Government tried to get to grips with, adding: “I don’t think we did. That was a great disappointment.” But he said he saw a “level of disingenuousness” in the Finance Minister’s comments because “we are in a capitalist market, driven by meeting projections.” No one wants to sacrifice the profit margin. People invest in companies to be paid dividends, so the bottom line is that those that are charged with the corporate well-being of the company are looking to drive the bottom line. They aren’t in business to be socially conscientious. Electricity was an essential need, so to make it affordable the only way you can encourage the free enterprise system to work is to encourage competition.” The Ascendant spokeswoman said the group shared Government’s concern about the high cost of living here and the impact that the cost of electricity had on that and on doing business. She said "any new initiative in the energy industry should focus on a reduction in energy prices and that it was a “strategic imperative” for Ascendant to work with Government and others to increase the efficient use of energy, reduce costs and find alternatives to traditional electricity production. Belco had no influence over the price of fuel oil globally but was always looking to get the best rates and had saved $5.9 million since January 2010 with efforts to hedge its fuel purchases. Electricity rates in Bermuda do not support diversification by the Ascendant Group. Electricity rates and the return on utility investment are regulated by the Energy Commission. The current return on utility investment of less than four percent is now well below average international accepted rates of return, which are closer to ten percent, as well as previously acceptable Bermuda rates of return. Ascendant is using a combination of earnings from across the group of companies, as well as investor funds and debt to expand its service and product offerings beyond the traditional electricity generation and delivery product, to other energy infrastructure solutions which will combine to bring better efficiencies and, in the long term, lower overall prices.”
2012. November 15. Belco proposed to increase base tariff rates over the next three years to finance a planned expansion of its facilities after electricity sales have stagnated. According to the proposal being made to the Energy Commission, base costs for residential customers would increase by 3.5 percent annually in 2012, 2013 and 2014. Facilities fees would increase by $3 in 2012 and 2013 and $2 in 2014. A Belco spokeswoman said that because the rate of electricity increase is based on how much is used by a customer, the rise would be less than 3.5 percent for most. She said the average residential customer uses 700 kilowatt hours (kWh) per month. Based on that usage, a Belco bill would increase from $280.13 to $283.05, or around $2.92 per month between 2011 and 2012. "The present average price per kWh for this customer inclusive of the facilities fee and with an average fuel adjustment rate of 15 percent 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.” According to a notice appearing in yesterday’s The Royal Gazette, the company proposes to remove the $40 minimum bill for residential service as of next year. Commercial demand customers would see rates increase by five percent per annum until 2014, while small commercial customers would see a 3.75 percent rate increase annually during the same period. The spokeswoman said: “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 to 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. Belco had received approval to increase rates this year, but chose not to do so given the current economic climate. The increase in fees will be used to fund a $300 million expansion, replacing ageing equipment that has reached the end of its operational life. Capital work over the next decade is imperative so that Belco may continue to provide a secure, reliable base load electric poser system for Bermuda’s residents and businesses." Along with a recently approved North Power Station, to be built in Pembroke, Belco intends to improve its transmission and distribution, replacing underwater cables and ageing equipment in several substations. “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 electricity power system that supports the Island’s progress.” Belco also said they are looking at piloting a Time-Of-Use rate next year, which would offer lower electricity costs at times of low usage, and higher rates at high-use periods. Members of the public are also invited to make written submissions to the Energy Commission between now and November 30, delivered either at their headquarters at the Department of Energy in the FB Perry Building, or at firstname.lastname@example.org.
2012. September 19. Minister of Environment Marc Bean is “bullish” on pursuing natural gas as an alternative energy solution for Bermuda. His comments came as part of his welcoming remarks at the Association of Caribbean Electric Utility Companies, CARILEC, Annual Renewable Energy Forum being held this week at the Fairmont Southampton. “We are working closely with our local utility Belco, to assist them in introducing natural gas as the short to midterm solution for our energy requirements,” he said. “I am extremely bullish on natural gas, and have high expectations for its use in electrical generation.” But according to Belco, the idea is still very much in the theoretical stage. “Belco and Government continue to explore alternative energy options, including liquefied natural gas (LNG). We appreciate Minister Bean's comments and agree that LNG has real potential as a fuel source for the Island. We, too, are enthusiastic about the prospects. That said, discussions about LNG are in very early stages, and there is considerable work to be done to determine the viability of LNG for Bermuda,” the company said in a statement. In late August, new President and CEO of Ascendant Group Walt Higgins, who has been a US energy industry leader and nuclear engineer, said it would cost hundreds of millions of dollars to transport liquid natural gas and build a LNG terminal and infrastructure in Bermuda. While natural gas is the cheapest and cleanest fossil fuel and is available in abundance, the fuel would need to be transported to Bermuda in its liquid form and a LNG terminal would need to be constructed to receive, cryogenically store and re-gasify the LNG for distribution. The construction of the terminal and associated infrastructure, said Belco, have a high capital cost. Mr Higgins, though, said that along with solar thermal heating and commercial scale solar photovoltaic projects, natural gas is the best alternative energy option for Bermuda. During his remarks to more than 30 Caribbean country representatives at the forum, Minister Bean added Government’s “two-pronged approach” to energy security — focusing on natural gas and other renewable energy sources — was on the cusp of great progress. “Combined with the complimentary energy generation via wind, solar, and tidal, I am convinced that our strategy for Bermuda will not only ensure energy security, but also, social and economic stability,” he said. Minister Bean also stressed that the Government was actively looking to the private sector to start the renewable energy process — inclusive of wind, solar, and tidal methods — rather than forcing change via government initiatives. “We must look to the private sector, who use economic calculation as the basis of their decision making, to innovate, develop, and produce technologies that stimulate demand in the market. It is my position that Government’s role is to facilitate the private sector to becoming the lead agent of this change,” he said. “Examples abound of state-led renewable energy initiatives that, ultimately, have led to increasing production cost, misallocation of scarce resources, and even the bankruptcy of some firms. It has been, in my opinion, a road to hell with good intentions.” To help facilitate growth in the industry, the Senate approved the Companies Amendment Act 2012 in July that allows for certain publicly traded companies in certain industries — including energy — to apply for relief from the rule that requires a minimum of 60 percent Bermudian ownership. The move lowers entry barriers for overseas investment in firms like Ascendant Group.
2012. July 1. With the approval of the Bermuda Government's Energy Commission, the fuel adjustment increased to 20.50 cents per kilowatt hour sold for meter readings taken on or after that date and until further notice. BELCO does not profit when the fuel adjustment rate increases. The Energy Commission sets the fuel adjustment rate every month based on a calculation that includes the cost of fuel and projected usage, and starts with a base cost of $30.00 per barrel of fuel. The cost of fuel for BELCO is made up of: the actual cost of the fuel purchased on the world market, plus transportation and a static Bermuda Customs duty of $15.10 per barrel. As the actual cost of fuel changes on the world market, the fuel adjustment rate changes. World market prices fluctuate greatly due to the growing demand for fuel around the world, limited refineries to process crude oil, and the impact of political, economic and other events. The fuel adjustment rate is announced in the media by the first day of each month. The fuel adjustment rate has climbed steadily rising since July 2009, when it stood at 11.5 cents. Now it is nearly 20 cents per kWh. The Bermuda Government's huge import duty on fuel oil is by far and away the highest tax in the world per square mile, both for oil and for the generation of electrical power. These make electricity three times the cost of the product in North America, Britain and most of Europe, plus the latter have no additional Fuel Adjustment Rate.
2012. May 16. Ascendant Group Ltd said last night it has shelved plans to install a new, more fuel-efficient power plant after Environment Minister Marc Bean ruled against the company’s request to raise base electricity rates. The Energy Commission had previously turned down Ascendant subsidiary Belco’s plan to raise rates for residential customers by 3.5 percent for three successive years. Belco appealed against the decision to Minister Bean. Last night, Ascendant revealed that the Minister had rejected its appeal. The revelation came in the company’s earnings statement, which showed Ascendant’s profits plunged by more than 30 percent as one-time charges related to early retirements and weakening energy demand in the slowing economy took their toll. Ascendant said it was now looking at its legal options and in light of the Minister’s decision, work on a the planned new, $70 million North Power Station would not proceed. The company said this left Belco “with no choice but to continue to meet Bermuda’s future energy demand with older, less efficient and less reliable generation plant”. Ascendant, which is also the parent company of Bermuda Gas, recorded net income of $11.12 million last year, down from $16.02 million in 2010. In its earnings statement, Ascendant said one-time charges totaling $3.88 million arose from decisions regarding both the company’s pension plan and employee early retirements. Electricity demand fell significantly last year, resulting in Belco’s net income falling $1.49 million to $14.54 million. Sales of electricity, net of fuel adjustment income, decreased $3.22 million in 2011 to $150.75 million, down from the $153.97 million in 2010. Residential kilowatt hour (kWh) sales decreased 4.2 percent in 2011, following an increase in 2010 of 1.9 percent. Average consumption per customer decreased 4.2 percent during the year to an average monthly consumption of 678.5 kWh. Ascendant stated: “A significant decrease of 11.58 million kWh is directly related to the economic downturn, as the number of active, metered residential units has declined due to a weak economy and increased numbers of non-Bermudian work permit holders leaving the Island, as some businesses either moved operations out of Bermuda or reduced staffing levels.” Electricity sales in the commercial sector also fell 1.3 percent, compared to a decrease of 1.9 percent in 2010. “Primary factors responsible for the reduction are business closures, reduced hours of operation, lower occupancy levels and concerted efforts by many businesses to reduce operating costs through energy conservation, due to the Island’s economic downturn,” Ascendant noted. The diesel fuel which Belco burns to generate electricity was a soaring expense in 2011. Fuel costs increased $14.71 million from $107.34 million in 2010 to $122.05 million. Ascendant saw a 17.7 percent increase in the average cost of fuel or an additional $18.05 per barrel, up from $101.83 per barrel in 2010 to $119.88 per barrel in 2011. Ascendant said Belco’s planned North Power Station project was budgeted to cost around $70 million over four years, involving the design and construction of three 14 megawatt (MW) diesel generating units plus associated work, with the engines scheduled to start operating in July 2013. “The introduction of these engines is essential to meet Bermuda’s future energy demand, as three less efficient existing engines are scheduled for retirement in 2013, as are all East Power Station Phase I engines in 2017. However, in February 2012, Belco received notice from Government’s Energy Commission that its October 2011 submission to increase basic tariff rates with effect from 1 January 2012 had been rejected. The rates increase is essential for Belco to secure financing for the North Power Station project. The Commission’s decision was appealed by Belco to the Minister of Environment, Planning & Infrastructure Strategy and on 9 May 2012, Belco received notification that the appeal had been rejected by the Minister with respect to the basic tariff rates increase. At the time of writing, Belco is considering its legal options. If the Minister’s decision stands, then the North Power Station project will not proceed, leaving Belco with no choice but to continue to meet Bermuda’s future energy demand with older, less efficient and less reliable generation plant. The rejection of the rates increase would also impact other capital projects. For example, in 2011 Belco commenced logistical work in preparation for the Prospect-to-Flatts transmission cable replacement in 2012; however, as a result of the Minister’s decision this project has been deferred. This project is considered extremely important, as it would allow very old, problematic and operationally expensive 22 kV cables on the eastern portion of the Island to be retired, providing a more secure link to the Flatts substation and mitigating possible overloads on Fort Hamilton feeds to Flatts.” Bermuda Gas’s net income fell 26.8 percent to $969,104, compared to $1.32 million in 2010. Two other Ascendant companies, PureNERGY and inVenture, both reported widening net losses. Renewable energy company PureNERGY sustained a loss of $1.39 million in the current year, following a 2010 loss of $405,276. Ascendant stated: “ Although recent announcements regarding financing, tax relief and other incentives for small-scale renewable energy systems are encouraging for PureNERGY, the operation of this company will be assessed during 2012, if these do not result in opportunities.” inVenture, which was formed to pursue new investment opportunities outside of the energy business, reported a net loss of $184,560 in 2011, as compared to a 2010 loss of $72,035. Ascendant added that plans “were well under way” to replace Vincent Ingham, who retired as chief executive officer at the end of last year.
2012. April 17. It was reported that Bermuda's total reliance on fossil fuels is largely to blame for the most recent huge hike in household electricity bills. The average family’s monthly Belco bill has jumped from $185 to $312 in the space of eight years, an increase of nearly 70 percent. Figures provided by Belco show the fuel adjustment rate, a section of the bill based on world oil prices and determined by the Energy Commission, has soared by nearly 400 percent since 2004, from $33 a month to $138 a month. The charge for owning a meter, meanwhile, has tripled from $10 a month to $30. Even though Belco froze its own section of the bill two years ago to help families during the economic crisis, the overall cost of the bill has continued to grow, thanks to the fuel adjustment increase. The fuel adjustment cost - presently nearly 20 cents per kWh. has fluctuated by almost 400 percent since 2004 and at present accounts for over 41 percent of the total average household energy cost.
2010. November. The Bermuda Electric Light Company Ltd (BELCO) began to allow residential customers with small-scale energy production systems to feed excess power to its grid at the same rate they pay for power. But take-up has been limited so far — probably due to heavy initial costs.
2009. November. The Energy Commission, a regulatory body, was empowered by the Energy Act 2009. It does not release its annual reports to the public — nor does it have to. The Energy Act requires only that it provides the relevant Minister with a report on its activities, not taxpayers. Visit www.energy.gov.bm for more information on the Commission and the Department of Energy.
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. There is an upfront deposit payable. 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 an electricity supplier there.
Alternative energy sources, when practical such as wind turbines and solar panels, are welcomed. To those with their own Bermuda homes - not most rented units - solar water heaters are expensive to purchase and install but may be able to pay for themselves in a few years. Also available are air-sourced heat pumps and geothermal heating/cooling systems. To encourage their use, Government has a 0% customs duty tariff on relevant imported items. However, there is not yet any plan, similar to that in the UK and believed to be in parts of Canada and the USA too, for any kind of government grant for home-owner-qualified purchase of solar panels or for surplus energy over and above that used by homes concerned to be sold to local or regional electricity providers.
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.
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. 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.
Most residential electricity is from electricity poles placed in the ground. In severe windstorms and hurricanes this can mean outages for days or weeks in extreme cases. Beyond Bermuda, many other places using electricity poles have found a solution or part-solution to this. Unlike in Bermuda, their utility entities do not use a centralized system with its limitations. Instead, they employ distributed generation which allows outages to be isolated with minimal consumer impact. BELCO has long considered the implications and costs of an all-underground system in Bermuda. But it would cost far too much, inconvenience far too many people using Bermuda's crowded small roads; and not be the technical answer.
When power outages occur (as they often do just as frequently beyond Bermuda), far more is lost in Bermuda 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. Each property in Bermuda then also loses the use of all toilets, bidets, wash basins, showers, baths and kitchen sinks fed from electrical pumps from the private water tanks supplying their home or apartment. There is an almost-complete absence of any central piped-in potable fresh water supply or waste water (sewage) removal. In such dire conditions consumers have to draw water from their water tanks by hand in buckets, haul them inside to pour into toilets to make them flush and clean dirty wash basins and do without a shower or bath. Plus, in the high Bermuda temperature and humidity, when prolonged outages occur, frozen foodstuffs in their freezers perish. To help avoid this and other problems mentioned it is recommended that Bermudian and Bermuda-based home owners buy an emergency back-up system - their own generator - and if a suitable unit is not available locally, to import one privately and pay the applicable customs duty.
Most homes with computers and businesses running computers should have at least one UPS for each computer. You can lease surge protection equipment for appliances, computers, stereo sets and televisions against damage caused by lightning or fluctuations in electricity. Businesses in Bermuda and in North America use a UPS routinely, unlike in the UK where they are much more the exception than the rule.
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.
With no natural gas available in 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 an overseas oil company and imported 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 imported 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 imported barbecue cylinders. These come in the 20 lb. size - as shown above - and can be purchased or rented 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 BBQ cylinder exchange program at local 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. Wesley Street, Hamilton. Telephone 295-3111. Fax: 295-8311. Sunshine Company Limited, The Famous Building, 57 Victoria Street, Hamilton HM 12, phone 295-6246.
Note that Bermuda, while using British traditions and ways of doing things in many respects, uses the American system, not the British UK one in calculating gasoline prices, yet oddly, prices gasoline in the UK/European way by the litre (liter), not per gallon. There is a significant difference between US gallon and British 1 gallon prices in liters. In the USA and Bermuda, the US gallon is the equivalent of 3.785411784 liters., compared to 1 Imperial (UK) gallon = 4.54609188 liters.
2014. December 22. As world oil prices fall, the Island is feeling the benefit with the price of gas now at its lowest since 2010, and power firm Belco also cutting its rates. Rubis last week set its gas price at $1.767 a litre, a 17.1 cent fall compared to November prices, while the price of diesel has gone down 14.8 cents to $1.602 a litre.
2014. April 27. Gasoline prices rose in April, up 1.6 cents a litre, the Finance Ministry announced. As a result, the maximum gasoline retail price displayed on the pumps is 213.90 cents a litre (liter), or $2.13.90. Diesel declined 0.2 cents a litre. Its maximum price at the pump is now 187.80 cents a litre, or $1.87.80. Kerosene also declined, down 1.6 cents a litre. The maximum cost is now 158.60 cents a litre, or $1.58.60. Thus, in April 2014 the Bermuda price for unleaded gasoline for cars and scooters, mopeds, etc is $8.10 per gallon.
About the same for unleaded gasoline as in London, cheaper for diesel fuel than in London where diesel costs more than for gasoline.
How Bermuda prices affect US and Canadian visitors. Bermuda prices for unleaded gasoline (petrol to newcomers from Britain) will come as a shock to our North American visitors, especially when compared to gasoline prices in the Caribbean. Here, the price of gasoline is higher than most other places anywhere in the world. Only the far North of Scotland, namely Sutherland, Caithness, Orkney, plus in Europe, Norway, Ireland and Iceland are they higher. Fluctuations in the US$ rates with UK Sterling and the Euro must also be taken into account.
In Bermuda, the Ministry of Finance regulates fuel prices in Bermuda based on a pricing formula agreed between Government and the industry. The selling price of fuels changes monthly in sympathy with supply prices. Costs to motorists and consumers of petrol (gasoline) and oils are on average, nearly three times the prices in USA; well over two times the prices in Canada; far more than double the cost of anywhere in the Caribbean. (213 percent more than the cheapest nation in the region, l liter of regular gasoline in the Cayman Islands was $1.69 and in Trinidad and Tobago, only $0.69 a liter).
But when you consider that Bermuda is
only 21 square miles (56 kilometers) in total land area, far smaller than anywhere else mentioned above
not near a mainland but a tiny island 600 miles due east of the nearest mainland, North Carolina, USA
has a total resident population of under 66,000 and a resident plus tourist population of under 69,000
there is far more justification for higher petrol (gasoline) and oil prices in tiny Bermuda than in Britain, despite the latter being a North Sea oil-producing country of 60 million people. Britain is the only oil-producing country in the world - the others are mostly in Saudi Arabia, other countries of the Middle East and Venezuela - that applies gasoline taxes far more heavily than most of the non oil-producing nations.
|Bermuda prices are in liters, not gallons||There are 3.785 liters to 1 US gallon|
In Bermuda, April 2014, $8.10 per gallon.
In USA see state-by-state prices per gallon at http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html
In New York, see New York Gas Prices (note, per gallon (each gallon is 3.785 liters)
In Toronto, see Toronto Gas Prices (in liters)
In London - same as tiny Bermuda
In Europe, see http://www.eia.doe.gov/emeu/international/gas1.html.
Bermuda consumes more oil and gas annually than the combined Caribbean islands - more than 800 miles to the south - of Antigua, Dominica, Grenada, St. Lucia and St. Vincent combined, yet pays so much more for them than those islands do in government duty and retail prices. It is one of the reasons why Bermuda is so expensive. Prices of oil, gasoline and related petroleum products are key factors mostly responsible for not only the cost of transport by air and land but also the prices we pay for accommodation, electricity, air conditioning, food, furniture, heat, household goods and more.
Bermuda prices are fixed and heavily taxed and, with all gasoline and oil imported, has very high Bermuda Government Customs Duties of US$ 0.54 per liter. This alone is 44 percent of the price consumers pay at the gasoline service stations, the biggest single reason for - and biggest single beneficiary of - the huge local prices. Government duties mentioned above of 44% plus employment and other taxes and their repercussions amount to about 58% of the total price. Perhaps because Bermuda visitors use mopeds - with gas tanks in liters, not gallons - they don't realize the price differential. Bermuda does not produce any oil or gas, all in imported - and is tiny in land area, only 21 miles in total land area. In contrast, the United Kingdom, which is an oil, petrol and gas producing country and is 58,000 miles in total land area, charges consumers 75% in total taxes.
More than 21,000 automobiles and 30,000 mopeds, trucks, taxis and buses are on the roads of Bermuda.
The Bermuda Government appoints a Price Control Commission (see Bermuda Government Boards) under the Price Commission Act 1974, to approve prices of petroleum products. It meets on or about the 16th day of each month to determine local prices. It sets the maximum levels that service stations may charge.
It is wrong to state that because Bermuda is only 21 square miles in total area, less gasoline is used proportionately. Because Bermuda's top legal speed is only 22 miles an hour (33 kilometers per hour), it does not enable motor vehicles to use fuel most efficiently. So the impact of the Bermuda cost is even more noticed, not less. Inefficient use adds to the expense instead of mitigating it.
The only two retailers allowed to offer gasoline and oil in the Bermuda marketplace are USA-owned ExxonMobil (trading in Bermuda as Esso) and the French business of Rubris, SA, see below.
Because of the price the Bermuda Government expects per liter from gasoline service stations, there is no competition between Esso and Shell shown below, the only two gasoline corporations allowed to sell to Bermuda and visiting consumers.
May Bermuda gas (petrol) stations are closed during Bermuda Public Holidays. Visitors on mopeds or scooters should tank up the day before or after. Also, gas (petrol) stations keep different - not standard - hours.
2013. July 10. Exxon Mobil and its affiliates signed an agreement with Barbados-based SOL (Simpson Oil Ltd) for the sale of Esso Bermuda’s downstream (retail) business. Esso Bermuda country manager Mark Fields said the deal was a share sale and the general public should not see any changes in the stores or branding for some time the Esso brand and Tigermarkets will remain the same. Coral Petroleum is the parent of Esso Bermuda. “Everything is business as normal,” Mr Fields said, noting that the Esso Bermuda offices would remain in Ferry Reach, St George’s and there would be no layoffs or job losses. “There will be no change in the Esso brand in Bermuda and the suppliers will still be Exxon Mobil. It’s essentially a change of the corporate ownership in the background.” He said none of the eight Esso service stations in Bermuda was being sold either; their ownership remains the same. Premier Craig Cannonier owns Esso City Tigermarket, Collector’s Hill Esso and Warwick Esso. SOL, which has been growing in the Caribbean for eight years, is buying Exxon Mobil and its affiliates in Barbados and a number of other Caribbean territories. The purchase includes 170 Esso service stations across the Caribbean, its industrial and wholesale operations as well as marine and aviation refuelling. It also includes a 14.5 percent share in SRA Oil Refinery located in Martinique. SOL, led by Barbadian business mogul Sir Kyffin Simpson, several years ago acquired Shell Antilles and Guianas Limited. The acquisition gave the company control over Shell’s retail and commercial fuels business in Barbados, St Lucia, Antigua, Anguilla, Guyana, Suriname, Belize, St Kitts/Nevis, St Vincent, Grenada, British Virgin Islands, Netherlands Antilles and Dominica. Simpson Motors, another of Sir Kyffin's companies, is the holder of the Suzuki franchise in the region.
Esso Bermuda is a division of a Bermudian corporation, Coral Petroleum Company Limited, owned by ExxonMobil. Stretching from the Esso Oil Docks at Ferry Reach in St. George's Parish to the Belco electricity generating plant in the industrial part of Pembroke Parish is the Esso pipeline that feeds Belco with heavy atmospheric gas and heavy oil. It enables Belco to generate 509 million kilowatt hours of electricity annually to businesses, hotels, guest houses, efficiency units and homes.Joint originator of gasoline products imported to Bermuda, for many years based at Ferry Reach, St. George's Parish, GE 01. Telephone (441) 294-5220. Fax (441) 294-5243. An Esso oil tanker arrives in Bermuda about once every six weeks to discharge fuel. Prices are the same as Rubis (see below). About half the 30 gas stations are owned by Esso. It alone pays the Bermuda Government many US$ millions a year in fuel taxes.
Many outlets island-wide. Always call first to ask for opening hours
French oil company RUBiS SA purchased Shell Oil’s operations in Bermuda in 2007. It continued to be marketed under the Shell brand until 2011 after which it switched to RUBiS. Terms of the purchase were not disclosed. Rubis revealed that Shell, which in Bermuda owns two major fuel depots, one liquefied natural gas terminal and 12 gas stations, had sales of $45 million per year in Bermuda and net income of $3.6 million. The agreements signed with Shell provide for a licence to use the Shell brand in the service stations as well as finished goods supply contracts. Rubis already has an extensive network of energy businesses in the Caribbean and French Guiana. The deal was announced in July 2006 at when Phil Burton, country chairman of Royal Dutch/Shell Companies Bermuda said a final decision was subject to the approval of shareholders and the Bermuda regulatory authorities. Shell has had the Bermuda operation on the market since late 2005. Rubis is one of the largest bulk storage operators in France. Through Rubis Gaz, the company distributes liquefied petroleum gas (LPG) to retailers as well as propane and butane to residential and commercial customers.
History: Based at its Ferry Reach head office, Shell House, Ferry Reach, St. George's Parish, GE 02. Telephone (441) 297-1577. Fax (441) 297-8472. In 1947 - a full three years before appropriate legislation officially launched the industry - Bermuda welcomed an organization known worldwide because of its distinctive trademark of a sea shell. With dramatic implications to fuel and light Bermuda's lawyers for future business of equal caliber, the Provident Fund of the combined petroleum companies known in The Netherlands as Voorzieningsfond Der Verbonden Petroleum Maatschappojen was transferred to Bermuda. It had been granted exemption from payment of United Kingdom Income Tax on its investments when it had to quickly transfer its Headquarters from The Hague to London following the fall of Holland in 1940.
Thus Shell arrived in Bermuda, initially as an investment vehicle to protect the pensions of employees of all companies within the Royal Dutch Shell umbrella from unnecessary taxation by Britain. Lawyers Conyers, Dill & Pearman, with bankers Jack Tucker (later, Sir Henry) of the Bank of Bermuda and Hal Butterfield (later, Sir Harry) of the Bank of N. T. Butterfield & Son, assisted in the transfer of Shell's Provident Fund to Bermuda. Three Shell VIPs, Sir George Legh-Jones, Mr. Tim Wilkinson and Mr. Tim Boyle even bought land in exclusive Tuckers Town. They built very expensive homes there, as a visible sign that Shell was here to stay. Its first staff - a group of 20 mostly young ladies - arrived from England on Shell tankers on September 28, 1947. Most have since died. Its first service station - still there - was on May 12 1952 at East Broadway in Pembroke Parish.
Shell was also the first to operate a corporate administrative structure for a collection of affiliated international companies outside the City of Hamilton, at Ferry Reach in St. George's Parish. Now they look after the retirement plan interests of Shell employees worldwide.
About half the 30 gas stations and marinas were until recently owned or operated by Shell. It paid the Bermuda Government more than US$ millions a year in fuel taxes. They have since been taken over by and since 2011 have traded as RUBiS.
Many outlets island-wide. Always call first to ask for opening hours.
It was the first product brought in by the West Indian Oil Agency (later, Esso) for cooking, lighting and heat. It is still imported, mostly for heating kerosene units in the winter months and as an emergency fuel source during frequent electricity outages. Until the year 2000, this was far less expensive than electricity, although also with a very heavy import duty.
Then naphtha, it was first imported into Bermuda by West Indian Oil Agency (later, Esso) in Bermuda in 1908 to coincide with the introduction by the Bermuda Electric Light Power & Traction Company (later, the Bermuda Electric Light Company Limited or Belco) of electricity in Bermuda. When commercial aircraft first flew between Bermuda and the USA in 1937, Esso Bermuda supplied the fuel.
October 6, 2015.
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