Belco has been given clearance to raise it electricity rates to customers by 2.5 percent every year for the next four years. In the fifth year the rates will rise three percent.

By putting up the amount it charges, the electricity company expects to raise some of the near half-a-billion dollars it needs to invest over the coming decade to provide new plant and infrastructure to meet the Island's growing demands for energy.

The size of the task ahead for the Bermuda Electric Light Company is immense. The current net value of its power station and assets is $241 million, but it estimates it will need to invest $497 million in new infrastructure over the next nine to 10 years.

Approval for the rate increases over the next five years has been given by the Price Control Commission. The company points out that its rate rises are below the current average Consumer Price Index rate of 3.1 percent per year.

In a shareholder letter, Belco Holdings' outgoing president Garry Madeiros explained the need for the company to push ahead with a planning application to redevelop its Pembroke power station, which will involve the creation of a new North Power Station with its own chimney stack of comparable size to the two currently in use.

A multi-phased overhaul and redevelopment of the plant is needed to ensure there is enough redundant capacity to ensure there is a reliable energy supply for the Island even if one of the power station's engines breaksdown or needs to be taken out of service for maintenance.

The company has reported that residents used less electricity on average in 2007 than the previous year, an average of 736.8kWh per month this year compared to 739.8kWh.

However more homes on the Island meant a 1.72 percent increase in residential demand for energy, while there was just over a two percent increase in demand customer usage and sales to small commercial customers.

Belco is now awaiting approval for its wide-ranging planning application to alter and expand the current power station, a plan that will involve the permanent closure of Cemetery Road from the Animal and Garden House to Cemetery Lane.

However, if the request for a permanent closure of the road is not granted, the company anticipates the road will need to be closed sporadically for a "minimum" aggregate time of just under 10 years while the power station site is altered.

In the shareholders' letter Mr. Madeiros said: "The reason we have submitted an application that covers the 20-year period is because the current Belco site is congested and in order to accommodate the next installation, we will have to re-configure the site.

"This includes demolishing the existing fuel tank facility and building the new power station there."

While Belco has committed itself to building an expanded diesel-powered plant it is to continue to investigate alternative energy possibilities.

Mr. Madeiros, who has worked for Belco for 22 years, said: "Belco has established a micro-renewable energy beta site and is developing its small scale renewable strategy and policies.

"We also continue to monitor developments in ocean current technologies and other large-scale renewable options to incorporate into our on-going planning activities.

"We will continue to work with Government and the community to find alternatives and solutions that will give us better options to meet the next critical deadline for power, which we anticipate will come in 2013."

As he steps down from the company's board of directors, as well as his presidency, Mr. Madeiros looked back on his years with Belco and said: "I am particularly proud of the internal cultural shift that has taken place within Belco, from a company with a monopolistic outlook to one that is customer focused and continuing to challenge itself to find new and better ways of meeting the community's energy needs."