Regulatory scrutiny of Bermuda’s sole commercial electricity supplier may cost several hundred thousand dollars.

The board of commissioners of the Regulatory Authority of Bermuda, during its meeting of February 7, resolved to approve funding for an investigation into the North Power Station up to $559,052.50, to be paid from the project utilisation fund.

In December, the RA announced an inquiry into Belco’s operations, which it expected would to lead to a reduction in the Fuel Adjustment Rate for customers.

The energy generator’s newest power station was their focus. Having been configured for liquefied natural gas, a fuel that ended up not being approved for use in Bermuda, the North Power Station was operated using an alternative fuel — primarily heavy fuel oil.

The firm has spent millions mitigating the resulting emissions, including the burning of diesel — a cleaner, more expensive fuel — along with HFO.

Belco president Wayne Caines said they were committed to improving operations at the plant, which experienced significant challenges with polluting emissions.

When the station came online in April 2020, Mr Caines heralded “a new era of power generation” on the island with cleaner electricity generation.

Since then, however, Belco has had numerous complaints from neighbours about sooty roofs and tanks.

In 2021, an expert review said the best way to fix the problem was to burn a lower polluting fuel.

At the time, Ricardo Energy & Environment, a British-based global environmental consultancy firm, said the pollution dumped on neighbouring properties was likely caused “at least in part” by the burning of heavy fuel oil, which Belco had continued to use as its primary fuel.

Then, eight months after the North Station powered up, the entire island was hit with a blackout.

The RA later attributed this to several critical deficiencies, including some equipment being left at factory settings instead of being switched to the recommended ones.

The RA called for a review of the entire North Power Station commissioning process, among other things.

Belco’s troubles were not over. Bermuda was hit with another total blackout in February 2023, which Mr Caines blamed on an equipment fault.

In the meantime, Belco raised the cost of electricity in Bermuda by 48.5 per cent in October, triggering widespread outrage in the community.

One Bermuda Alliance opposition leader Jarion Richardson called the hike a “punch to the gut” for people already struggling financially.

However, last December Belco announced a three-month decrease in the Fuel Adjustment Rate from 24.517 cents per kilowatt-hour to 18.362 cents per kWh, until the end of March.

The regulator said its decision came after a review of Belco’s 2024 first-quarter FAR submission, indicating a decrease in fuel pricing.

The FAR reflects the total cost to purchase and deliver fuel to the Belco central plant and is comprised of two parts – the fuel adjustment and taxes.