Power charge increases by Belco will force up costs for hotels and grocery stores.

Stephen Todd, chief executive of the Bermuda Hotel Association, said that rising power costs would impact his members.

He added: “There are concerns — we have just now started to see an increase in occupancy. We’re going to be utilising more in the way of power and that will equate to additional operating expenses for each of our members.”

He was speaking after Belco announced that commercial power rates were set to go up between 16.5 per cent and 22.4 per cent, dependent on the amount of power used, from next month.

Mr Todd said: “We are anticipating it will represent an increase in the overall operating expenses to our members.

“We’re in the process, from an individual property standpoint, evaluating this.

“We will be working with a relationship manager at Belco to determine how we best manage this and understand the overall cost to our individual members. We’re looking at how it affects us for this year and the projected expenses for 2017.”

He added: “We’re getting feedback and intelligence from the members now — I’m expecting that over the next few days we will get a better indication of how it will affect them.”

Mr Todd said: “We understand the rationale behind it, but every additional cost increases expenses and that makes it much more expensive to operate.”

But he added that hoteliers — keen to stay competitive in a regional and world market — would only raise room rates as a last resort.

He said: “That is something we are conscious of on an ongoing basis. We don’t want to increase the cost of rooms.

“We have to ensure we are competitive and a destination the visitor will choose to come to.”

Tredwick Gorham, head of Hamilton grocery store Supermart, added that supermarkets were also unlikely to mark-up prices to cover extra outlay on power.

Mr Gorham said: “My understanding is the base rate is what is going up and fuel adjustment will go up and down.”

He added the store was still working out what the increases would mean for the business.

Mr Gorham said: “Nobody is happy when their electricity bill goes up. But we have put a lot of time and effort into trying to reduce our electricity costs.”

He added: “If we changed the prices every time something else changed people would be dizzy — the bottom line is we have to absorb this.

“I would say it will increase our costs, but we are busy trying to figure it out now. It sounds like a lot, but I don’t know if it is.

“As it stands right now, electricity bills are lower because of the price of oil, but who knows where that’s going to go?” The Energy Commission backed Belco’s bid for increases after hearing that the firm’s return on capital was lower than similar island utilities.

The power firm had asked for a rate to bring its return on capital up to 10.5 per cent.

The Energy Commission approved increases that will raise the rate of return to 7 per cent this year and 8 per cent in 2017.

Belco argued that it needed to increase earnings to maintain necessary investment in plant and infrastructure.