How Bermuda’s energy costs compare to other islands
From the “facilities charge” on your bill to how Bermuda’s electricity costs compare to other islands
— and is Belco securing the best pricing for fuel? Below the company answers some of your questions about energy costs.
The Facilities Charge
“The Facilities Charge is not a new charge,” a Belco spokesperson said. “It is a typical electric industry utility charge and has been in effect at Belco since January 1, 1989. Up until 2009, the Facilities Charge was shown as a separate line item on the statement. When Belco changed its billing system at the start of 2009, it was included in the line item called Energy Charge.
“Late last year, the Energy Commission instructed Belco to again break it out as a separate line item on the monthly statement. The Facilities Charge covers the cost of getting power to the each individual customer’s premise, accounts and facilitating the customer account. It includes:
l Service drops from the transformer to individual customer meters
l Meter Reading
l Customer Accounts (billing and accounting)
l Customer Service
Electricity Rates Across the Region — Comparison
Belco says some charts readers have referred to may be misleading when you consider average customer usage.
Also, Belco’s Facilities Charge is higher than some others in the region, and its Energy Charge lower than others.
The rate structure in 2011 included the Facilities Charge of $30, which accounts for approximately 50% of the total shown on the chart.
Also, a chart one reader referred to (http://www.myjpsco.com/_pdfs/rates_across_the_region-June2011.pdf) represents the monthly statement for a customer using 100 kilowatt hours (kWh) per month.
“Essentially no one uses only 100 kWh, unless they are supplementing their power supply with something else,” the spokesperson said.
“The average Belco residential customer uses 650 kWh per month. Electricity rate structures are based on blocks of usage, and rate structures across the region are not identical. So, the best comparison is one that looks at “average usage”.
“If you look the Belco statement as it is formatted today you will see that the first block of kWh used (up to 250 kWh), cost 0.1575 cents per kWh. The price increases after the first 250 kWh to 0.24 cents per kWh up until 700 kWh. After 700 kWh the rate is 0.2972 cents per kWh. This is a new rate structure put into place by the Energy Commission in 2012, to encourage greater conservation, as the more you use the more you pay.
“The (Belco supplied) chart (pictured) shows a comparison of what the ‘average’ residential customer in Bermuda would pay per month versus some other island utilities. This graph also shows the components of the overall bill i.e. Facilities Charge, Energy (kWh), and Fuel Adjustment.”
Fuel Prices; What Belco Pays
Belco uses heavy fuel and diesel to generate power, not gasoline.
“In May 2009, Belco paid $73.97 per barrel of diesel,” the Belco spokesperson said. “In May 2013, that same barrel of diesel cost Belco $157.97. In May 2009, a barrel of heavy fuel cost $96. 17. In May 2013, a barrel of heavy fuel cost $124.39.
“The Fuel Adjustment Rate tracks the price Belco paid for the corresponding fuel.
“Although it has no influence over the price of fuel, where there are opportunities to secure better pricing, Belco will enter into forward purchase agreements to lock in the future price. The company also goes to the market on a regular basis to renegotiate its supply contracts to obtain the most favourable overall fuel rates. Since January 2010, Belco’s efforts to hedge its fuel purchases have resulted in a saving of $5.9 million versus what would have been paid under the terms of its fuel supply contract and those savings have been passed on to customers in lower Fuel Adjustment Rates than otherwise would be been charged.”