Average monthly electricity bills are expected to increase by $2.17 this month following a fuel adjustment increase, the Government announced yesterday.

The Regulatory Authority of Bermuda has set the Fuel Adjustment Rate at 14.23 cents per kWh — up from 13.78 cents per kWh — effective July 1, a government spokeswoman said.

For the average residential customer, the new rate adds about $2.17 to the monthly bill, an increase of about 1 per cent, she added.

The rise would have been far steeper without government fuel duty relief, the spokeswoman said.

She added: “Without that relief, the Fuel Adjustment Rate would stand at roughly 16.46 cents per kWh.

“The relief holds about 2.19 cents per kWh off the fuel component that households would otherwise carry and absorbs the larger part of the underlying cost increase.”

The spokeswoman said the increase reflects higher international fuel prices over the past quarter, driven by volatility in global energy markets.

She said the increase carries no change to Belco’s base rates or regulated returns.

In March, Belco said electricity bills were unaffected by global oil price surges stemming from the war involving the United States, Israel and Iran — and the resulting halt to shipping through the Strait of Hormuz.

However, Joe Barbosa, a senior finance director at Belco, explained in an opinion article for The Royal Gazette, that a prolonged war could have led to increases in the FAR beyond April.

Alexa Lightbourne, the Minister of Home Affairs, said this week: “I know what a rising power bill means in a Bermudian home.

“Global fuel prices rose this quarter, and the Government chose to stand between that increase and the family bill because we want to protect Bermudians during times of global instability.

“A cost that would have reached 16.46 cents now sits at 14.226 cents, because the Government stepped in.

“We will keep this protection in place and keep watching every cent to help those we serve.”

The FAR passes the cost of fuel down to customers and increases or decreases with the actual cost of fuel.

As such, bills follow what fuel costs at the time, the spokeswoman said.

She noted: “Belco revised its filing after updated analysis captured a recent downward movement in global fuel prices.

“The revision lowered the proposed increase from about 5.97 per cent to about 3.21 per cent.”