Controlling your Bermuda electricity costs
Old-timers called it the Lack-a-Light Company. How many remember everyone standing in line with cash to pay their ‘lacktricity’ bills — some still do. It was a time full of social interaction in those queues, we were less harried and hurried then, plus you always came off with great gossip — from those in the know.
The Bermuda Electric Light Company (Belco) bill payment these days, whether fully electronic or manual, is a time of gnashing of teeth and frustrated reaction to its ever increasing costs. There are multiple business reasons for requesting rate increases; we can’t really control that, but we can manage our personal electricity usage more efficiently.
Electricity is an integral part of our lives. Say it ain’t so, for could we make do with little or no electric connections? Our forebears had little to none and managed quite well, thank you very much. Electricity costs to the consumer are significant. The bill includes your base rate energy charges, a fuel adjustment rate charge, a Bermuda customs duty charge of $15.10* per barrel of oil (included in the rate) and a facilities charge.
Personally, I resent the customs surcharge imposed by our government — whose idea was that, anyway? Isn’t any profit from a monopoly returned back to the consumer in efficiencies and new infrastructure, after paying shareholders? That’s another story for another day.
Typically in any retail volume transaction, the more you use, the more you buy, the cheaper the cost. This competitive pricing tactic is an aggressive sales motivator to generate more product or service consumption. Bermuda energy costs are charge-tiered exactly the opposite — the more electricity you use the more you pay per kilowatt hour.
How can you manage the electric-use system for your benefit?
This is what it is. We have choices in our lives. We can use our survival skills to absolutely minimise the high cost of our electric use; or, we can just throw up our hands in futility by accepting the status quo. I am always up for a challenge — I hope you are too.
Let’s examine in detail what and how we can control utility costs. Consider setting a small goal of saving, say $50-150 a month on your bill. This saving will depend on the size of your home and your personal consumption. It may seem small but that extra buys groceries, or pays down part of a cellphone bill. It ain’t chicken feed, even in Bermuda.
How much you can or want to reduce your utility usage is up to you. Many will feel it is far too much work, while others have already taken large steps to minimise their footprint and the industry use of carbon fuels. Would you be surprised if I told you that I have met individuals with ordinary sized homes whose utility bills never go above $150 per month. No, you gasp — how do they do it?
Easy, they have been practicing budgeting for years. They radically limit the use of air-conditioners (or have none), fans, stoves, electric warmth heaters, water heaters, lights, power-up strip devices, electric can openers, mixers, knives, irons, hair dryers, electronic phones, washers and dryers, and so on. Some very stoically-driven individuals have taken the measure of turning off all electric water heaters for half a year — the summer months. This means cold showers, cold dishwashing, etc. Are you willing to sacrifice convenience and comfort? We shall see. Readers, send me your comments!!
Do you know what your average electric bill is for the year? Do you know what your bill translates into as barrels of oil burned just for you — remember $15.10 per barrel customs tax direct to Government? Do you know how to read your meter bill and apply the progressive use calculations as issued and listed by Belco on their website? How do you cook your food? How many times a day do you open and close your microwave, toaster oven and the like? Do you know which appliances use the most and the least power?
We run a quick assessment of your tiered facility usage charges below. Watch for next week, when we break these charges out for you in detail. You should know exactly what you are using and paying for in utility fees. Who knows maybe you will catch billing cycle mistakes. It could happen!
This example is based on residential services charges as at 2013 and does not reflect recently requested increases. The initial fee is the facilities charge — representing the cost of the meters, administration of your hookups / home / reading, and billing you for the service.
Then there is the energy charges, which are tiered. The first block is zero to 50 kilowatts, costed at 16 cents per kWh; the second block is 251 to 700 kWh, at 24 cents per kWh, and then the tail block from 701 and upward at 30 cents per kWh.
Initial fee. $33.00
First block 250 kWh x 16 cents = $40
Second block 449 kWh x 24 cents = $107.76
Tail block 150 kWh x 30 cents = $45
And that is not all. Your total kilowatt usage per month also has a fuel-adjustment-rate tacked on at 12 cents per kWh. Let us say that you are using 700 kilowatts per month. This means another $84 (700 kWh multiplied by 12 cents).
I have used the Belco website for these calculations. The rates are not all listed on the same page — making for confusion when it comes to reaching a reasonably accurate total. I will research further for next week’s detail. You should know that I make no affirmation that these numbers are correct or current, but from this snapshot, you can certainly get a sense of the big picture.
Where do you want to be in this equation? Costs going up or costs contained? You decide.
Next week, in part 2, Moneywise provides you with a spreadsheet (both electronic or using paper/ calculator) to independently calculate your electric usage by the month. We review where the usage is concentrated and provide as many tips as possible to help you keep down the cost of your electric bill.
A number of readers contributed cost savings tips in the first week of the Bermuda Tightwad Gazette on May 16. We will feature those in another Bermuda Tightwad.
Read the Gazette feature on the nitty-gritty cost of real food at http://www.royalgazette.com/article/20150516/COLUMN07/150519812
*All references taken directly for the Belco website www.belco.bm
Readers, please feel free to send me any and all tips on how you manage costs in your household.
Martha Harris Myron CPA PFS CFP JSM, Masters of Law: International Tax and Financial Services. Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. The Pondstraddler* Life™ Consultancy provides cross border financial planning for internationally mobile individuals and their businesses residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus on residents of Bermuda, the premier international finance centre.
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