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House: Belco faces regulation

Belco faces regulation under a new Electricity Bill

Customers may get lower electricity bills as the Bermuda Government warned Belco it could face healthy competition from alternative power suppliers.

Under a draft Electricity Bill tabled in Parliament, Belco will retain control of the grid — but Grant Gibbons, the Minister of Economic Development, expressed hope more entities will enter the market.

Dr Gibbons told The Royal Gazette a regulatory authority would be tasked with “looking for others out there that could supply our electricity demands”.

He said: “This is providing the ability to get independent power producers and bring down customers’ bills.”

Dr Gibbons said potential new providers could be a natural gas plant or solar farm on the disused “finger” runway at LF Wade International Airport, or a hotel installing a generator and selling off its excess to the grid.

Encouraging renewable energy use by residents and small commercial operators is another feature of the document, tabled for consultation and expected to be formally submitted early in the next parliamentary session.

The proposal suggests Belco will integrate a resource plan, which would then be directed by the regulatory authority. The grid itself would remain under Belco’s control, and the utility company would continue to control the billing of customers.

Dr Gibbons said: “There is no point from an economic perspective to have someone else putting up new poles and installing new transmission cables.

“That remains the responsibility of Belco.

“If someone else needs to build that, it will simply get passed on to the customer. It’s the generation part that we’re looking to get competition.”

He described the move as diversification rather than seeking to break a monopoly, but told the House of Assembly Belco would be “carefully regulated to ensure accountability” in return for its sole provider status.

Measures such as the 2013 Customs duty break for energy-saving thermal storage technology stand to continue once the legislation is passed, Dr Gibbons said.

The bill also seeks to “facilitate the use of renewables, because they make good economic sense for Bermuda, and not through the extensive subsidies which exist in some other jurisdictions”, Dr Gibbons told the House.

Later yesterday, legislators approved a draft order to convert the 80-acre “finger” into public land for use in electricity production.

Shawn Crockwell, the Minister of Tourism and Transport, said the area had been identified as the only available land that could accommodate a large scale solar power plant, capable of providing 25 per cent of the Island’s power.

Under the Civil Airport Amendment, the airport’s lines would be redrawn, making the finger public land under the control of the Minister of Public Works.

Both Lawrence Scott, the Shadow Minister of Transport, and Marc Bean, the Opposition leader, pointed out that the finger is much-used at present. Hazardous materials are stored at the vacant runway and aircraft are diverted there in emergencies, as well as military aircraft, the Opposition said.

“That finger is strategically necessary, not just for us but for many foreign militaries,” Mr Bean said, requesting to hear contingency plans.

Mr Bean conceded that the south-facing finger alongside Castle Harbour was an ideal site for solar energy, telling MPs that a company had lobbied for its use as such under the Progressive Labour Party administration.

However, he said there were no other sites in the Island that could be used as effectively to store hazardous materials.

Mr Crockwell replied that it was necessary to split off the finger from airport land because of the negotiations for the redevelopment of an air terminal.

“Government does not want this piece of land to be part of that discussion,” Mr Crockwell said. The order was subsequently approved.