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Community groups to examine Belco increase

Age Concern executive director Claudette Fleming.

Community groups have taken a cautious approach to Belco rate changes, saying they will look closely at how the move will affect the less fortunate.

Starting next month, residential customers will pay 8.7 per cent more on their first 250 kilowatt hours, 5.7 per cent more on the next 450 kWh and 17.7 per cent more on anything over 700 kWh on their monthly bill.

Belco said the impact would be softened by the fuel adjustment rate being at a nine-year low of 7.65 cents per kWh, meaning the total bill for small and average residential users will be lower when the new rates take effect next month than it was 12 months earlier.

An average user who had a monthly bill of $225.38 in June 2015 will have a bill of $217.45 when the new rates kick in next month, Belco said, representing a decrease of 3.52 per cent.

However, bills will also be subject to fluctuation based on the fuel adjustment rate — for a clear look at the relationship between the fuel adjustment rate and global oil prices, see page 11 of today’s Business section.

Speaking yesterday, Charles Jeffers of Age Concern said that the main question many in the public had about the rate change was how the move would affect the company’s profit margin.

“What we have to look at is what the profit margins are going to be,” he said. “Obviously they have to cover their costs and they have to pull in a ‘reasonable profit’ but what are the expectations of their shareholders?

“I also know they are looking for some kind of investment into new equipment because some of their equipment is outdated and has been for a few years.

“They really need to be clear with the public what they are doing.” Asked about how the changes would affect seniors, Mr Jeffers said a wait-and-see approach might be appropriate, noting that Belco had stated that those who use less electricity might see their bills shrink.

“If so, that’s nice for the people at the lower end, but it needs to be laid out in a way so everyone understands,” he said.

“I would expect that most seniors would be at the lower energy usage group, and if they are using a small amount of electricity, according to what they are saying, their rates are going to go down.

“Of course, Age Concern will be looking very closely to see what it means, but until people get one or two bills under the new system you really cannot tell.”

Claudette Fleming, the executive director of Age Concern, added: “Moving forward into the summer, we look forward to a corresponding increase in social insurance payouts to assist seniors in meeting the increasing cost of living demands that seniors have to meet on fixed or diminishing incomes.

“It seems only fair to our seniors and an appropriate time, as regulators/legislators set the tone and the opportunity for what constitutes a ‘reasonable’ financial investment.”

Meanwhile, former parliamentarian Quinton Edness expressed concerns that far more people would see increased energy costs than would see lower.

“I bet if you get down to it, you would find out a lot more people are being affected by higher costs than by lower costs,” he said. “What the Government has to do is find out how to reduce or maintain the cost of energy in Bermuda.

“One of the largest figures in most families’ monthly bills is the energy costs. It’s particularly stressful for seniors. Their income is static and a great deal of them are suffering in silence because they cannot afford the cost of living in Bermuda.”

He called on the Bermuda Government to do more to encourage the adoption of solar energy in Bermuda, making the cost-saving technology more broadly available, as well as pursuing alternative energy sources such as tidal energy and geothermal energy.

Martha Dismont,the executive director of Family Centre, said the organisation was taking a close look at the changes and how they would affect the public.

“Obviously we are looking into how this will impact people, particularly lower income households,” she said.