The Bermuda Electric Light Company Limited strives to provide safe, reliable and affordable electricity to our 36,000 customers. We also strive for transparency in explaining our costs, and a fair sharing of those costs among our diverse customer base.

From August 1, Belco's electricity rates will be restructured and customer bills redesigned as directed and approved by the Regulatory Authority.

The rates will now be unbundled. Charges that were previously bundled together will be separated, so the new bill shows what customers pay for the generation of their electricity (generation charges) and what they pay for the transmission and distribution of it (transmission and distribution charges). This new bill enables customers to see how their rate divides between the cost of generating, and transmitting and distributing, the electricity they use.

This change is being implemented after a regulatory review beginning in 2022, in addition to a ministerial direction requiring the RA to consider differentiated tariffs based on how customers use the grid.

The rates themselves have been adjusted, most notably the facilities charge, to be more cost-reflective of the service provided to each customer.

Customers who self-generate as well as consume energy from the grid use the system differently from those who only require electricity to be delivered to their homes. The revised rate structure better aligns charges with actual grid usage, so costs are shared more fairly across all customers.

The impact varies by customer class and by usage, so the change is not a single across-the-board increase or decrease. For most residential customers who do not have distributed generators (primarily rooftop solar), the change means a modest increase of about $1.62 to $4.72 a month.

Thirty years ago, there was almost no distributed solar generation in Bermuda. There is now approximately 15 megawatts of rooftop solar, which requires specialised equipment and management by Belco to ensure grid stability. This grid stability comes at a cost.

Consider how a solar customer uses the grid. During the day, when the sun is out, they may draw little from Belco and may even send power back. But at night, on cloudy days, or when their system is not generating enough, they rely on the grid to be there the moment they need it.

They should not have to wait for us to start up or bring additional generation online, they expect full power, instantly. That means Belco must build, maintain and keep generation ready to meet a customer’s full needs at any moment, even for customers who use us only part of the time.

Keeping that capacity available around the clock costs the same whether it is used every hour or only some of them.

Solar is a positive step for Bermuda, but we must work together to find a solution that is fair for all customers, so that those without solar are not left carrying the full cost of that standby service for those who have it.

Customers with distributed generators will see a larger increase, primarily in their facilities charge, which reflects the increased cost of operating and maintaining a grid that now must carry power to and from their home or business while ensuring a reliable supply for the entire island.

To be clear, this change is not penalising solar customers; it is about a fairer distribution of costs and the result of detailed analysis of the costs to serve customers carried out by Belco, the RA, independent expert advice, multiple rounds of technical modelling, a detailed regulatory assessment and public consultation.

To achieve an equitable energy future for all Bermuda residents, every sector must carry its fair share, including solar PV generators. All generators, including private solar PV companies, must be regulated to control costs and ensure the protection of the grid and Belco customers. A level playing field is not optional, it is essential.

The new rate structure demonstrates our commitment to fairness and transparency and is cost-reflective of the energy provided to our customers. I encourage residents to visit our website, where a full breakdown of the new rate structures is available, with tables and worked examples showing how the change affects each type of customer.

Customers are also encouraged to visit belco.bm to learn more about energy efficiency tips and practical ways to lower their monthly usage.

• Wayne Caines is the president of Belco