Belco will be seeking to cut its costs with some tough decisions having to be made over the next several months in the face of the current recession which has taken its toll on the utility provider.That is according to Vince Ingham, president and CEO of the Ascendant Group, who wrote in his fourth-quarter 2010 letter to shareholders that all of the parents company’s other subsidiaries would also be reviewing their labour and operating costs while looking to increase productivity.He said that Belco also intended to make a $66 million capital investment in Bermuda’s electricity infrastructure in 2011, including replacement engines at the central plant in Pembroke and two new substations, as well as underground cable reinforcements to accommodate distributed generation, including large-scale renewable energy installations, once sites have been agreed by Government.“As we all know, 2010 has been an exceptional year in many ways,” he said. “With this year drawing to a close, I believe that it is important to share with you how Ascendant Group is managing the effects of economic recession and leveraging the strengths and commitment of our people in order to be positioned for continued success.“Recent headlines, stating that Bermuda is in a dramatically worse economic situation than had been originally anticipated, are confirmed by significantly reduced electricity sales for Belco in all consumer sectors“The beginning of 2010 saw increased residential electricity sales with the completion of new housing units, but sales to residences levelled off, while commercial sales remained significantly lower than projected throughout the year.“The decline in electricity sales was indicative of less activity in local and international business, and particularly in tourism, as well as fewer people occupying residential, commercial and hotel space. In 2010, Belco also saw a disturbing increase in its accounts receivable, another effect of the continuing challenging economic climate.”Mr Ingham said that given the current economic situation, Belco announced on December 17, 2010 it would apply to the Energy Commission to defer a previously approved 1.5 percent average electricity rate increase, which would have come into effective on January 1, 2011, to help the community weather the downturn.He added that in order to delay immediate workforce redundancies, the electric utility company had implemented a freeze on salary increases in 2011 and was seeking to negotiate with the union for a wage increase freeze for its unionised employees, as well as reviewing the cost of employee benefits and other expenses to determine further cost-saving measures, including restructuring and possible outsourcing.“Clearly, these are unprecedented times and Belco is re-organising to redefine activities and expectations,” he said. “The next several months will require difficult decisions, as Belco manages down costs to meet this challenge.“In addition to Belco’s efforts, all other Ascendant Group subsidiaries are also reviewing labour and operating costs with the view to capturing savings, while also looking for ways to increase productivity.”Mr Ingham said that despite the economic challenges, Bermuda’s reputation as a destination for businesses and tourists was dependent on maintaining a solid infrastructure, which includes a secure, reliable electricity supply, and that in order to continue delivering power reliably to homes and businesses, Belco needed to retire some of its old plant, replacing it with new generation facilities by 2013 and has thus filed an application with the Department of Planning last week for the phased, 10-year redevelopment of its central plant.“As Bermuda looks to build infrastructure to sustain and improve the provision of first class services to residents, tourists and international business, Ascendant Group is poised to participate,” he said.“Ascendant Group subsidiary InVenture Limited is uniquely positioned to leverage the group’s collective expertise to deliver multi-faceted infrastructure projects that incorporate a balance of established and cutting-edge technologies. Bermuda Gas offers the island clean-burning fuel alternatives, while PureNERGY Renewables provides Bermuda with a range of customised renewable energy solutions. The sharing of knowledge and viewpoints across the Ascendant Group subsidiaries produces a progressive approach to planning Bermuda’s energy future.”He closed by saying that looking ahead, 2011 would require innovative thinking, and a new collective, co-operative approach to achieving success for the Island, and that the Ascendant Group was up to the challenge.