Legislative action needed for timing of Belco sale
The statements by home affairs minister Walter Roban to The Royal Gazette last week only re-emphasise the need for the Bermuda legislature to act now to amend the 2016 Electricity Act to require the island’s first integrated resource proposal to be released by the Regulatory Authority of Bermuda well before any bids to transfer control of Belco are considered by its board.
The prospective buyers of Belco need to know the real, well-thought-out targets for the mix of renewables and continued use of fossil fuels that the RA determines to be acceptable in order to make a realistic bid.
The Belco board should know what IRP is acceptable to the RA to be certain that the bidder has the capability to deliver the acceptable mix of energy in the time frame being considered.
Setting a price and choosing a buyer before the prospective buyer knows what product is expected to be delivered in a transaction, which has not happened in Belco’s 100-year history and which will not happen again perhaps for as long a period in the future, is throwing prudence and caution to the winds of chance.
From all the public information available to date, it is very clear that neither the independent RA nor the Bermuda Government and the people of Bermuda will accept the old and now outdated IRP submitted by Belco in 2018. There is no downside risk to the Bermuda legislature fixing an oversight in the original legislation, as a transfer of control of Belco occurring before the first IRP is reviewed and endorsed by the Regulatory Authority was not contemplated by the drafters of the Electricity Act of 2016.
• Sir John Swan, a businessman, was the former Premier of Bermuda between 1982 and 1995, and a former Belco board member. Michael Murphy, a former attorney for American International Group, was the chairman of the Association of Bermuda Insurers and Reinsurers between 1985 and 2005