Power bills in Bermuda are set to rise this month with Belco blaming significantly increased costs for fuel.

The company said the Fuel Adjustment Rate rose by about 23 per cent - from 13.486 cents per kilowatt hour to 16.61 cents per kilowatt hour - on October 1.

A spokesman for the company said that for an average residential customer using 600kWhs per month, the monthly FAR fees would rise from $80.91 to $99.66 - an increase of $18.75.

The spokesman noted that while the rate had increased, it was still well below the peak of July 2012 when the FAR was set at 20.5 cents.

In a letter signed by Michelle Leman, managing director of transmission, distribution and retail, the company said the “substantial” increase would continue until further notice, but that the FAR is evaluated on a quarterly basis.

The letter said: “During the past nine months, the price of oil has steadily increased from a low of approximately $35.50 per barrel to above $75 today, or an approximately 110 per cent increase.

“Refined fuels consequently are also exhibiting similar price increases.

“It is important to note that Belco periodically carries out competitive bidding processes in order to establish reliable sources of fuel at the most competitive prices.”

The company said it does work to take advantage of favourable market prices with “100 per cent of any opportunistic savings or reductions in fuel costs being passed onto consumers” but customers were impacted by the changing cost of fuel.

“Belco will continue to act in the best interests of its customers and may enter into future contracts for the procurement of fuel in order to secure reliable supply at competitive prices or take advantage of any market dislocation in the price of fuel, as Belco did in early 2020,” the letter continued.

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BELCO FAR OCT 2021-2.pdf

The company said the FAR included Government taxes on fuel - a $31.79 per barrel charge for fuel and a 40 cent per barrel charge to support the Unesco World Heritage Site in St George’s.

The letter added: “The FAR is a cost recovery mechanism and all cost increases as well as any savings due to a reduction in Belco fuel costs are passed on to customers.

“We remain committed to transitioning to a renewable energy company and are working diligently towards integrating alternative power generating technologies, including solar, and exploring the efficacy of integrating offshore wind turbines into our energy mix.

“Longer term, this will reduce our dependency on fossil fuel and will reduce our exposure to price shocks in the oil market.

“Whilst this isn’t possible at the present time, we at Belco are focused on, and have made great progress on, improving efficiencies and system reliabilities and it is unfortunate that these will be negatively impacted by the substantial increase in fuel costs this year.”