Customers should be reimbursed if an investigation finds bills were miscalculated by Belco, the Ministry of Home Affairs said.

The assertion was made after the Regulatory Authority announced it is to investigate operations at Belco’s North Power Station — an investigation it expects will lead to a reduction in the Fuel Adjustment Rate going forward.

A ministry spokesman said: “If the calculation is proven to be erroneous, there should be a fair and equitable means of return to affected customers.”

Belco sought an increase in the FAR from 16.513 cents per kilowatt-hour to 24.517 cents.

The request was granted by the RA and came into effect at the start of October, resulting in about 20 per cent increase in monthly bills.

The RA's investigation aims to determine whether any costs associated with the operation of the plant have been unreasonably incurred.

A spokesman for the RA said: “The RA affirms that the FAR calculation in Q4 of 2023 was conducted accurately based on the information provided by Belco and aligned within our legal authority and responsibility.

“In the event that new information surfaces, causing inaccuracies in the data and influencing calculations, the RA reserves its position pending the results of the ongoing inquiry.”

Walter Roban, the Minister of Home Affairs, said he was not surprised the RA initiated the inquiry given that his ministry ordered the regulator to take action against Belco back in July.

The spokesman said: “In July 2023, the minister said he would direct the RA to ‘commence appropriate actions’ after it was claimed the firm breached the Clean Air Act.

“Given this, he is not surprised by the RA's investigation.”

The Royal Gazette has asked the RA whether it was the Ministry of Home Affairs order that sparked the investigation.

The RA spokesman said: “It is crucial to clarify that the RA, as an independent regulator, exercises its mandate impartially and commenced this inquiry into Belco's operations in response to information presented within the 2024/25 Retail Tariff Review received by Belco on October 18, 2023.

“The RA operates within the Regulatory Authority Act 2011 and is committed to ensuring fair and transparent processes to the greatest extent as permitted by law.”

The government notice posted in the Official Gazette in June referenced a condition in Belco’s operating licence that relates to emissions considered to be a statutory nuisance under the Public Health Act 1949.

Mr Roban said at the time: “On June 21, I received a letter from the Department of Environment and Natural Resources, in which they have notified me of Belco’s breach of the Clean Air Act 1991, and therefore Belco’s breach of condition 5.4.8 of their operating licence.

“Due to this breach, and in accordance with section 7 of the Regulatory Authority Act 2011, and in exercise of my powers under section 8 of the Electricity Act 2016, I hereby direct the RA to commence appropriate actions as allowed by the Electricity Act 2016, Belco’s operating licence, and any other terms or conditions set in the change of ownership, with immediate effect.”

The North Power Station has experienced significant challenges with emissions, having been configured for liquefied natural gas, a fuel that ended up not being approved for use in Bermuda, and run on an alternative fuel — primarily heavy fuel oil.

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

Belco told The Royal Gazette in March that switching fuel grade “may contribute to higher costs for customers”.

The Department of Environment and Natural Resources took over a separate investigation in April launched by the Ministry of Health regarding emissions.

That investigation followed a series by this newspaper that began in March called Clearing the Air, which included a catalogue of the challenges leading up to and following the commissioning of the NPS in 2020.

Asked the status of the DENR investigation, the spokesman said: “As the investigation is ongoing, an outcome has yet to be determined.

“Since the Belco operating licence (OL-114), with associated revisions, was issued and accepted by Belco in June 2023, DENR has been collecting data on soot events to confirm whether the emissions are likely to be considered ‘detrimental to property’ as per condition 5.4.8 of the operating licence and Section 12(1)(v) of the Clean Air Act 1991.”

He said the department will require input from the Attorney-General’s Chambers before taking any formal action.

The Royal Gazette has asked the ministry whether, as part of its investigation, it is collecting data on soot and emissions events to confirm whether the emissions are likely to also be considered detrimental to human health.