Dear Sir,

In an article published in The Royal Gazette of July 11, 2026, Belco president Wayne Caines argued that the upcoming August 1 rate changes are designed to be fair, transparent and not punitive towards solar users. He stated that Belco is “unbundling” bills into generation and transmission and distribution charges, solar customers will see higher facilities charges because they rely on the grid intermittently, Belco must maintain full back-up generation capacity for solar households, and that the new tariff structure is meant to reflect “actual grid usage,” not discourage renewable adoption.

These points reflect Belco’s internal logic: cost reflectivity, grid stability, and transparency. However, they do not tell the full story. When you strip away the technical language, the implications are clear — solar users will pay significantly more in fixed charges and the economics of rooftop solar will weaken. Belco is pricing the cost of maintaining back-up generation into a fixed fee that solar users cannot avoid.

The tariff structure shifts financial risk away from Belco and onto consumers and the Regulatory Authority has approved a tariff that may unintentionally discourage renewable adoption. This is not “punishment”, but it is a structural disincentive. and in a monopoly market, disincentives matter.

Mr Caines did not address cost allocation transparency — Belco has not disclosed the actual cost basis for the facilities charge. Without transparency, fairness cannot be independently verified. He did not address Proportionality — solar users reduce daytime load, peak demand, and long run capital requirements. If fixed charges rise faster than the cost they impose, the tariff becomes regressive. Moreover, higher fixed charges contradict Bermuda’s stated energy transition goals.

Belco is a vertically integrated monopoly. A tariff that disproportionately burdens solar users entrenches monopoly generation and restricts distributed energy competition. There should be competitive neutrality.

In the present circumstances the RA lacks explicit statutory powers to demand cost allocation disclosure, impose fixed charge caps, conduct mandatory competition impact assessments, order tariff redesigns and to protect solar users from discriminatory pricing. These omissions matter because they reveal a structural imbalance: Belco has pricing power; consumers do not have protection.

When we compare Bermuda with other small jurisdictions, Bermuda is behind. Other small islands with similar constraints have already modernised their regulatory frameworks.

For example, in Malta there is a fixed charges capped, mandatory cost allocation disclosure, solar neutral tariff rules and annual public tariff review. In Jersey there are unbundled tariffs, competition impact assessments requirement, abuse of dominance rules apply directly to utilities and transparent tariff methodologies.

In Cayman Islands, fixed charges cannot exceed a defined percentage of the average bill, the regulator can order tariff redesign, and solar users are protected by renewable neutral tariff rules. In Barbados, there are low, stable fixed charges, a strong consumer fairness test, solar users are protected from cross subsidisation and there is mandatory public consultation for tariff changes.

Every one of these jurisdictions has stronger consumer protection and fair trade safeguards than Bermuda. Bermuda cannot continue with a regulatory framework that allows a monopoly utility to set fixed charges without full transparency, proportionality, or competition safeguards.

The RA must be empowered to demand cost allocation disclosure, cap fixed charges, conduct competition impact assessments, order tariff redesigns. protect solar users from discriminatory pricing, enforce renewable neutral tariff rules and impose administrative penalties for unfair practices.

Bermuda needs an upgraded Consumer Protection and Fair Trade Act that defines unfair pricing, prohibits discriminatory tariffs, establishes consumer rights to challenge charges, demand public consultation for major tariff changes, mandates transparency in essential service pricing and provides statutory remedies for consumers.

Bermuda must strive towards competitive neutrality. Tariffs must not favour monopoly generation over distributed solar. This must be written into law. Before any tariff change is approved, the RA must publish a public report on solar adoption impacts, consumer affordability, long term competition effects and alignment with national energy policy

Belco’s tariff redesign is not the problem — it is the symptom. The real issue is that Bermuda’s regulatory and consumer protection framework is outdated, fragmented and insufficient for a modern energy economy. If we do not act now, solar adoption will slow, consumer costs will rise, monopoly power will deepen, renewable energy policy will stall and public trust will continue to be eroded.

The solution is not to criticise Belco for doing what the law allows. The solution is to change the law. Mr Caines’s letter provides a useful explanation of Belco’s position. But it also highlights the urgent need for stronger regulation, greater transparency and modern consumer protection.

Bermuda must adopt a Fair Trade and Competition Act that protects consumers, supports renewable energy, and ensures that essential service monopolies operate in public interest. The time for incremental reform has passed. The legislature must act — decisively, transparently and now.

KENSLEY A. McDOWALL

City of Hamilton