an 8.9-percent increase on the previous year.

Although the company's sales of electrical energy were up by $5.9 million (6 percent) to $100.2 million, the general trend among consumers was toward less consumption.

When new sales to US Navy were excluded, there was actually a small sales decrease of 0.3 percent during the 12 months to December 31, 1991, despite higher electricity charges.

This decrease was partly as a result of more winter closures among Bermuda's hotels.

Belco chairman Mr. Neville Conyers said: "As predicted, 1991 proved to be a very challenging year.

"Despite setting new records for peak demand, sales of energy were affected by the continued decline in the Bermuda economy, the downturn in tourist arrivals and a greater emphasis on energy conservation.'' Exceptional periods of cold weather in March and warm weather in August led to record levels for winter and summer peak loads, according to Belco's annual report.

Mr. Conyers added: "It is the increases in the annual peak load on our system which are the main driving force for the need for major capital investment in additional generating equipment.'' With discounts, Belco's operating revenue came to $97.5 million, up 6.4 percent.

Operating expenses went up by 7.4 percent to $81.4 million, largely because of a 4.5-percent increase in generation costs to $50.4 million.

Belco said it had managed to control major items of expense growth, but there were added charges in depreciation of $905,000, environmental expenses of $850,000 and fuel costs of $995,000.

Net operating income increased by 1.8 percent to $16.1 million. Mr. Conyers said Belco calculated it needed to increase electricity charges from January 1, 1992, in order to meet future financial requirements.

"In light of the current economic climate in Bermuda, a decision was taken to defer an application for an increase at that time,'' he said.

"This decision will mean that certain capital projects will be delayed.

However, to enable the company to continue with its programmes of improving plant facilities and services in the future, it will be necessary to review the need for an increase in basic rates later in 1992.'' 1991 ANNUAL RESULTS PROFIT .$11.5 M OPERATING REVENUE .$97.5M OPERATING EXPENSES .$81.4M OPERATING PROFIT .$16.1M ASSETS .$163 M BASIC EARN/SHARE .$2.91.