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Belco proposes to cut facilities charge for 44% of customers

Belco has put forward a proposal to cut its facilities charge for residential customers who use the least electricity — which could result in a lower electricity bill for an estimated 44 percent of households.

However, the 28 percent of households who are the largest consumers of electricity would see their bills rise by close to four percent as a result of an increase in the facilities charge for them.

Currently, the $33 fixed facilities charge applies to all residential customers, regardless of their energy usage. The charge covers the cost of specific infrastructure and business services required for each metered connection.

Belco's proposal was submitted today to the Energy Commission.

The proposed changes show Belco's estimates of the overall changes to customers' bills at different levels of electricity usage, when the change to the facilities charge is factored in:

Tier 1: 0-10 kWh per day — facilities charge goes from $33 to $15 — 21.1 percent reduction in overall bill (26% of customers)

Tier 2: 10-15 kWh per day — $33 to $25 — 5 percent reduction (18 percent of customers)

Tier 3: 15-25 kWh per day — $33 — Unchanged — NO CHANGE (28 percent of customers)

Tier 4: 25-50 kWh per day — $33 to $49.50 — 3.8 percent increase (22 percent of customers)

Tier 5: 50+ kWh per day — $33 to $75 — 3.9 percent increase (6 percent of customers)

In a statement released today, Belco said: “The new proposal is for a Graduated Facilities Charge that would reduce costs for lower-usage residential customers and slightly increase the overall cost for those who consume the highest number of kilowatt hours (kWh) per month.

“The proposal is in response to the call to assist lower income customers who struggle to meet monthly bills, during these difficult economic times. If it is approved by the Energy Commission, 44 percent of Belco customers will see reductions in their overall monthly electricity bills; 28 percent will be unaffected; 28 percent of the highest energy users will see their overall monthly electricity bills increase slightly, depending upon energy consumption.

If approved, the Graduated Facilities Charge would be based on each customer's average daily kilowatt kWh consumption over the previous 12-month period, which would be reassessed monthly, updating the Annual Rolling Average.

“The only exception to the proposed Graduated Facilities Charge is for customers on Belco's Net Metering Programme who will remain on a fixed $33 per month charge. Customers on the Net Metering Programme draw energy from the grid when needed and intermittently sell excess power back to the grid when their consumption is less than what is being produced by their personal renewable energy systems.”

Education and Economic Development Minister Grant Gibbons, whose staff have been in ongoing discussions with Belco, said he was pleased Belco had submitted the proposal on the facilities charge.

“We believe that if approved, this proposal will provide some helpful cost relief for those residential customers who are low users of electricity and who tend to be seniors, as well as families and individuals in the lower income brackets,” Dr Gibbons said.

“It would be premature to comment further because it is the Energy Commission who must consider and rule on the submission by Belco.

“While we await the Commission's decision, I will add that the Ministry and the Department of Energy is working hard to ensure that we move Bermuda in a positive direction and that we implement strategies that ensure a more sustainable energy future.

“The goal is to lower the cost of energy for all individuals, businesses and organisations while maintaining the reliability that we have come to expect in our energy supply.”

The utility's proposed changes come in the wake of Finance Minister's Bob Richards' claim in his Budget statement that Belco's “inefficiency is eroding Bermuda's competitive position as a jurisdiction that provides value to customers”.

The high cost of electricity was “a great burden for the Bermudian people whose buying power is reduced due to the high cost of just keeping the lights on”, Mr Richards said.

Belco: Proposing changes to facilities charge

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Published March 06, 2014 at 1:28 pm (Updated March 06, 2014 at 1:44 pm)

Belco proposes to cut facilities charge for 44% of customers

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