getting Bermudians to use less electricity and to reduce peak demand for power.

But the utility has also warned that the price of electricity may be increased following a rate freeze in 1992 and fears over the cost of meeting Government clean air regulations.

The news was contained in the company's annual report which was sent out to shareholders this week, and revealed it had earned $11.1 million, down 3.1 percent on its 1991 profits. See Page 11 for Belco's full financial results.

"Our demand side management programmes in the 90's are intended to help get more from the kilowatts we are already using,'' the report said. "If we can use our existing generating plant more efficiently, we may be able to delay the economic and environmental costs associated with building additional power stations.'' The report said four pilot programmes are now being launched: An energy cooperative scheme in which large businesses will be asked to run their own generators at Belco's request during periods of peak demand; Free energy audits will be offered to up to 10 large and up to 20 medium users of electricity with the proviso that they implement the recommendations; Water heater conservation kits will be offered to selected residential customers; and An education programme on energy conservation will also be launched.

Belco also announced the establishment of an in-house committee aimed at burying power lines around the Island. But it warned the minimum cost of putting all cables underground over a 10-year period would be $235 million.

And it said the company had been able to delay a planned rate increase in 1992 after holding down costs but it would have to review the rate increase again this year.

Chairman Mr. Neville Conyers said the major issue highlighted in a customer survey last year was cost of service. "We too are concerned about cost of electricity in Bermuda,'' he said. "While accepting our responsibility to control our costs, we must also realise there may be additional expenses required for us to comply with Bermuda's new Clean Air Act regulations.

"Additionally, any major commitment by Belco and the community to place our electricity system underground will certainly affect our cost of service. How far we go to protect and improve our environment must be carefully weighed against what we as a community can afford.'' Mr. Conyers added: "Unfortunately, despite all our efforts to reduce costs in 1992, fuel-oil consumption benefits realised from improved efficiency in plant operation early in the year were offset in August by a serious problem with one of our new deisel engines, which forced us to rely more heavily on our gas turbines.''