The Ascendant Group will soon unveil a multiyear energy plan which they say will revolutionise the Island’s power supply and begin transitioning Bermuda toward cleaner, more efficient and lower cost energy production.

Ascendant, the owner of electricity supplier Belco, said last night it has slashed its dividend to shareholders, payable at the end of this month, in anticipation of a large capital investment needed to upgrade Bermuda’s energy generating facilities.

In order to deliver on their plans, Ascendant will also have to acquire financing from the capital markets.

The company is on the verge of proposing an Integrated Resource Plan (IRP) which will recommend a diverse portfolio of energy solutions, including renewable energy deployment, conservation and energy efficiency measures, together with a transition to liquefied natural gas (LNG) fuel to achieve lower cost energy.

The company declared a dividend of 7.5 cents per share payable on June 30, 2014 to shareholders of record as of June 19, 2014. This follows a declared a dividend in March of 21.25 cents per share.

President and chief executive officer of Ascendant Group Limited, Walter Higgins said, “We believe that the former dividend level is unsustainable, given Bermuda’s current economic realities, the effect this has had on the company’s financial performance and the strategic energy needs of the island.

“By reducing the quarterly dividend to 7.5 cents per share, we will retain some of the much-needed capital to invest in energy infrastructure, while providing a dividend return to investors commensurate with company earnings in this difficult economy. The reduced annual dividend positions our dividend payout ratio in line with other comparable utilities.”

Mr Higgins said the initial rollout of renewable and energy efficiency measures contained within the IRP could begin within one year, but transitioning to LNG will take longer.

He said, “The IRP is complex and requires a year of additional planning and consultation to arrive at a planning and regulatory framework which will work for customers and investors.

“Renewable pilot projects are already underway and energy efficiency measures could begin once there is regulatory approval.

“It is estimated it will take three to five years to build the LNG infrastructure, and this, too, will lead to reduced costs, as LNG has lower and less volatile pricing than the fuel oil we presently use. LNG is also cleaner with fewer emissions entering the environment.”

The company said that historically, it’s annual capital investment in infrastructure and business operations surpassed annual net earnings.

The statement said, “Shareholders have enabled the company to invest between $20 million and $40 million annually in electricity system infrastructure. The investment enables Bermuda’s residents and businesses to enjoy a 99.96 percent system reliability rating, which set the standard for small island jurisdictions.

“In 2013, the company’s electric utility, Belco received CARILEC’s ‘Best Utility Award’ for its performance, as compared with Caribbean electric utilities. Belcos electricity prices are very comparable to most other island nations/states. The company also continues to take steps to decrease its operating and administrative expenses.”

Mr Higgins added, “Clean, affordable, reliable energy is absolutely fundamental to this country’s quality of life and productivity, including business retention and development.

“Likewise, Ascendant’s success is directly linked to Bermuda’s growth, stability and prosperity. It is in the best interests of shareholders, employees, consumers and the community at large for Ascendant Group to invest in our business in order to secure a bright energy future for Bermuda.”