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Hayward concerned over Belco price hike proposal

That was the message from Green campaigner Mr. Stuart Hayward last week at a public hearing into the firm's planned price rises.

The hearing also got a sneak preview of a report to the Premier's Commission on Competitiveness, apparently calling for tougher monitoring of Belco and discounts for hotels.

The hearing was held by the Price Control Commission to decide whether Belco could increase rates by 2.75 percent next year.

The increase -- the first for two years -- would mean about $3 a month more for the average customer.

The company also wants increases of 3.5 percent in 1995 and 1996.

Mr. Hayward said people with smaller-than-average bills were paying more per unit than big users.

This was because power got cheaper the more you used, except for the very heaviest users.

This was an encouragement to consume, he said. Instead, people who used the least should pay the least per unit.

Executive vice-president of Belco Mr. Garry Madeiros said the first units used had to be more expensive because of the fixed cost of providing power.

The present system was appropriate: "The person who's using more is paying more.

'' But lawyer Mr. Michael Mello, chairman of the commission, asked Belco to report back on possibly changing their price policy.

Mr. Madeiros said the firm needed the rises to help pay increased costs and support capital expenditure.

"What we have is a lot of equipment coming to the age of retirement that needs to be replaced, at a time when growth is going down.

'' Belco engineering operations vice-president Mr. Vincent Ingham said equipment problems had caused more blackouts than in the company's wildest dreams.

There had been an explosion in one recently-bought diesel engine. There had been no injuries, but a lot of damage.

He said the firm was spending out on environmental improvements -- like equipment to cut pollution of Pembroke canal.

Belco was also anticipating more vigorous monitoring of air quality, said Mr.

Ingham.

This could save the firm money on anti-pollution equipment by revealing air quality was not as bad as first thought.

The Bermuda Hotel Association was one of the objectors to the "indiscriminate'' price rises.

In a written statement, BHA spokesman Mr. John Harvey said one of the committees of the Commission on Competitiveness had concluded Belco should be monitored as an "essential monopoly''.

It had also recommended reviewing Belco's "employment costs'' and introducing "volume discounts'' to help the hospitality industry.

He submitted a report done for the Southampton Princess.

This said the hotel's $2.2 million bill would be 41 percent lower in the Bahamas, 57 percent lower in Puerto Rico and 61 percent lower in Hawaii.

Mr. Madeiros replied hotels had been slow, compared with other businesses, in adopting energy-saving measures.

Bermuda could not be compared to other places and their infrastructures, he said.

Another objector, the Consumer Affairs Board, said people were still feeling the effects of a recession. Any increases should be no more than inflation, it argued.

Mr. Mello said the public wondered why Belco spent money on TV adverts when it was a monopoly.

Mr. Madeiros said the firm only advertised when it sponsored publicly-desirable programmes.

Such programmes did not have spots available for short "sponsored by'' statements, the hearing was told.

Mr. Donald Scott, acting assistant financial secretary at the Finance Ministry, said it did not object to the 1994 increase. But with inflation at around two or 2.5 percent, it did not agree with the subsequent increases.