RA’s reasons for replacement generators

  • Aaron Smith, interim chief executive of the Regulatory Authority of Bermuda

    Aaron Smith, interim chief executive of the Regulatory Authority of Bermuda


A decision to allow Belco to replace ageing generators was necessary for safety and the security of electricity supply for Bermuda, the Regulatory Authority of Bermuda has said.

Last week it was announced that the Authority had issued an order for the replacement of aged generation assets permitting Belco to start installation of four new dual-fuel generators, capable of a combined output of 56 megawatts. The Authority also gave approval to a system for battery energy storage.

Aaron Smith, interim chief executive of the RA, said: “Much of Belco’s current generation capacity has gone beyond its normal life expectancy and this had become a critical issue in terms of safety as well as the security of supply for Bermuda, which were major factors in our decision to approve this replacement generation.”

The RA is currently in the process of developing an Integrated Resource Plan — a wide-ranging plan for the future of electricity supply in Bermuda. The IRP will be ready for approval later this year.

Mr Smith said: “The decision to allow the new generators does not in any way pre-empt the IRP, which will take a comprehensive view of Bermuda’s energy system taking into account its needs and requirements. We expect a final plan to be ready later this year, after public consultation.”

The Authority has just embarked on consultation on the methodology used to decide the retail tariff for electricity — the formula for determining the rate that the consumer pays.

Mr Smith added: “Until we finalise the methodology, which must take into account issues such as economic efficiency and affordable prices to end users, it would be inappropriate to speculate on what the future tariff may be. The approval of the replacement of assets was not an approval for an increase in rates.

“Despite our approval for the new generators, there will be no decision on what the tariff will be until the methodology is set and a retail tariff review using that methodology has been completed.”

The retail tariff consultation document is available on the Authority’s website, www.rab.bm. Responses may be submitted by going to the “Consultations” drop down menu and selecting “Submit Your Response”. Comments should be submitted before 5pm on March 29.

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Published Mar 15, 2018 at 12:54 pm (Updated Mar 15, 2018 at 12:54 pm)

RA’s reasons for replacement generators

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