Government and Belco engage in war of words over RA
The head of Bermuda’s electricity company hit back yesterday against perceived attempts at government influence over the energy sector watchdog.
Wayne Caines, the president of Belco, acknowledged the Government’s call to the Regulatory Authority to look for “potential cost savings and efficiencies”.
He added, however, that the creation of an Energy Policy Steering Committee without representation from Belco or the RA did not allow room for teamwork.
Mr Caines said: “How can this be in the best interest of consumers when all stakeholders are not being consulted on industry changes?
“This is a troubling course of action for all of Bermuda, as industry experts who possess the technical knowledge and operational experience necessary for sound energy policy decisions are not included in the process.”
The House of Assembly heard in March that the steering committee would be made up of representatives from a range of backgrounds, and that former members of the RA and Belco would “contribute their insights”.
Mr Caines’s comments yesterday came after Alexa Lightbourne, the Minister of Home Affairs, published a directive that called for the RA — which regulates the electricity sector, among others — to consider the introduction of different levels of billing for consumers based on the extent of their reliance on the island’s electricity grid.
The directive, published in the Official Gazette, also suggested that the authority strengthen its consumer protection and education measures.
Mr Caines said that Belco had been working “diligently” to address rising costs through “multiple strategic initiatives”.
He explained that the company proposed an Integrated Resource Plan to the RA in 2023, which suggested switching to liquefied natural gas.
Mr Caines added that Belco was looking into streamlining business operations to simplify efforts and reduce costs.
He said: “It is essential that the Regulatory Authority be allowed to operate as originally intended — as an independent regulator free from government influence.
“The RA has the technical expertise and works to ensure decisions are made in the best interest of customers, ensuring reliable and cost-effective electricity through established regulatory processes.
“Belco operates under a robust regulatory framework, governed by the RA, which oversees how Belco deploys capital and determines the rates set for customers based on thorough technical and financial analysis.
“This regulatory framework must be allowed to function without political interference to maintain the integrity of rate-setting decisions and ensure they are based on sound engineering and economic principles rather than political considerations.”
Alexa Lightbourne, the Minister of Home Affairs, said that her directive to the Regulatory Authority was issued after public feedback.
In response to the comments from Wayne Caines, she said: “As the minister responsible for energy, my foremost obligation is to the people of Bermuda, families, seniors and small businesses, who continue to shoulder the burden of high electricity costs in a volatile global economy.
“This government’s directive to the Regulatory Authority was not issued lightly, but it appreciates and moved on the mandate given by the people of Bermuda.
“The mandate was issued following consultation and feedback from the public who have demanded that the Government ensure that energy is more affordable.
“Belco’s call for regulatory independence cannot be selectively invoked when it suits corporate interests.”
Ms Lightbourne added: “The public should be reminded that the Regulatory Authority was created to serve the public interest, not to function as a shield against accountability or against evolving public-policy objectives aligned to global standards.
“Technical expertise is vital, but what is Mr Caines suggesting of the experience of the diverse group who have been selected?
“The public should be reminded that Belco has lost in court twice while trying to increase rates on Bermudians.
“The Government is focused on delivering economic justice.
“Bermuda cannot afford to maintain status quo where consumers are told to wait for relief while monopoly providers prioritise capital recovery over equity.
“In the face of record inflation and cost pressures, the public have every right to expect both urgency and innovation in how our utilities are governed.
“The Ministry of Home Affairs rejects the notion that excluding vested energy providers from a policy steering committee compromises fairness. On the contrary, it protects it.
“As indicated directly to Belco, they will be consulted as they are a valued stakeholder. But that does not deter us from ensuring that long-term policy decisions are shaped by a diversity of voices.
“We encourage Belco to engage constructively.
“Bermudians deserve a 21st-century energy system — one that is cleaner, more affordable and designed with the public’s needs at its heart.
“The ministry will not be deterred.”
Mr Caines, a former MP whose departure from politics in January paved the way for Ms Lightbourne to run successfully in the Devonshire North West seat he vacated, said that transparency and education were “central” to his company.
He added that Belco simplified complex economics for customers and communicated its rate structure and renewable options.
Mr Caines added that the company met stakeholders over the past few weeks to discuss its measures and will hold several town halls starting on June 23.
He said: “Despite challenging island conditions, Belco consistently outperforms reliability benchmarks compared to other jurisdictions.
“Over the last ten years, we have made significant infrastructure investments including replacing underground transmission cables, building the North Power Station, bringing online our battery energy storage system and implementing advanced metering infrastructure.
“Our technical expertise, island-specific knowledge and track record of reliability during extreme events position us uniquely to lead Bermuda’s energy transition.
“Through our parent company's global network, we have access to international best practices and comprehensive understanding of distributed energy resource integration.
“Belco remains committed to making continued infrastructure investments in the best interest of our customers, but can only do so effectively in a regulatory environment that provides certainty and maintains the integrity of established governance frameworks.”
• To read the response from Wayne Caines in full, see Related Media
• UPDATE: this article has been amended with comment from the Minister of Home Affairs
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