The president of Belco has said the energy firm “desperately” wants to pursue liquefied natural gas, a fuel earlier rejected in Bermuda, as part of the island’s future energy mix.

Wayne Caines made the company’s position clear in an opinion piece published in The Royal Gazette as well as in a subsequent e-mail he wrote to Thad Murdoch, a Pembroke resident who had responded to Mr Caines’s article with a Letter to the Editor criticising the utility’s business decisions.

Dr Murdoch wrote of a “deep frustration shared by many residents in Pembroke” after Mr Caines had, in his article, lauded the efforts of Belco over the past 119 years and defended its operation in the face of numerous polluting events by the utility.

Mr Caines had claimed in his piece that Belco had created $50 million in fuel savings for ratepayers since the 2020 commissioning of the North Power Station, which has been the source of numerous soot fallouts and excessive emissions.

Dr Murdoch retaliated with the letter, where he questioned the cost of the devaluation of area residents’ property affected by the pollution, not to mention the potential cost to health.

He pointed out that Belco contributed to the cause of the problems by — as admitted earlier by Mr Caines — configuring the station’s engines for LNG despite no approvals for the fuel and, when it was rejected, running them on heavy fuel oil instead.

Mr Caines then wrote an e-mail directly to Dr Murdoch, with others copied in, again defending the company and calling for the community’s support of LNG, which he claimed would be more beneficial to Bermuda’s environment.

In the correspondence to Dr Murdoch, seen by the Gazette, Mr Caines wrote: “Here's the reality I face every day: our customers consistently tell us they need affordable electricity.

“With current fuel options, we can only deliver affordable power using HFO.

“While we're permitted to use cleaner, lighter fuels, this would significantly increase costs for every single one of our 36,000 customers on the island.

“We desperately want to use LNG — it would be both cleaner and more cost-effective — but we need regulatory approval through the Integrated Resource Plan process. We can't make this transition unilaterally.”

The IRP is a road map for Bermuda’s future energy generation and its development is under way.

Mr Caines added: “Belco recognises that a move to natural gas would substantially reduce the emissions challenges we face today.

“Transition to an alternative fuel is part of Belco’s long-term strategy, which is evaluated through the IRP process.

“Achieving it, however, requires broader alignment with government policy, regulatory support and international energy supply arrangements.

“We encourage ongoing community and stakeholder advocacy — including engagement with minister [and area MP Jason] Hayward — to help advance these goals as quickly as practicable.”

“Significant investment in fuel infrastructure” was one of the reasons the Regulatory Authority rejected Belco’s initial LNG proposal.

The RA said at the time: “Although the LNG scenarios are expected to have lower system costs than the non-LNG scenarios under the base case assumptions, there are disadvantages in pursuing LNG, mainly driven by the significant investment required in fuel infrastructure.

“There is a risk of regretting the decision to invest in LNG.”

Castalia, a consultancy, reported in 2016 that electricity generation in Bermuda could be switched over to LNG by 2020 for between $258 million and $315 million.

Leidos, an engineering consultancy, said that “LNG infrastructure for the full conversion of generation” would cost in the region of $140 million, in an IRP proposal produced with Belco in 2018.

Walter Higgins, a former chief executive of Belco’s former parent company Ascendant Group, said in 2014 that the Ascendant board of directors would seek approval for a massive infrastructure project to enable the conversion to LNG.

Belco owner Algonquin Power & Utilities Corp is a Canadian-regulated utility company that provides water, wastewater, natural gas and electricity services through its operating subsidiaries Liberty Utilities.

Mr Caines said in his e-mail to Dr Murdoch that Belco fully funds all services to mitigate soot fallout from the NPS, including roof painting, car cleaning, tank cleaning and property power washing “at no cost to affected residents”.

However, Belco had attempted to have the customer foot the bill for retrofitting the NPS to run more efficiently on HFO.

The capital costs for the retrofit were in the region of $2.4 million. The utility took the RA to court over its refusal to allow costs to be passed on but lost on all counts.

Elevated fuel costs for the use of light fuel oil to mitigate the pollution problems are passed to the customer as part of the fuel adjustment rate.

Mr Caines also said in his e-mail to Dr Murdoch that decisions were made to build houses in proximity to the plant.

Dr Murdoch has since told the Gazette: “We in Bermuda live within ten miles of Belco, while no other country allows HFO to be burnt on land, or even out in the ocean, within 200 miles of the shore.

“Mr Caines’s e-mail attempts to blame the community for problems Belco alone created.

“Our families were here long before the plant, we did not choose the dirty fuel and we did not build it next to our children's schools. This pollution crisis is the direct result of Belco's own decisions.

“We reject this effort to blame the victims. Belco is not even apologising when they should be taking sincere action for the mess it alone has created. It is not our job to clean up their mess.”