Dear Sir,

To begin to answer Jeff Conyers’s question (Letter to the Editor, March 23, 2023), one has to understand that Algonquin is not in the business of actually running power plants. Its business model is to acquire small utilities that are either unable or unwilling to run their businesses as heavily regulated utilities.

Managing a utility in an increasingly regulated business environment is very different from reliably providing electricity to customers. Many small-utility shareholders see selling to an operator such as Algonquin as an easy — and very lucrative — out. That is exactly where the Belco shareholders found themselves. The other thing to understand is that Algonquin is very skilled at manoeuvring around regulators. It is how it really makes its money.

Converting “dirty” fossil-generating stations into “cleaner” fossil-generating stations is Algonquin’s preferred business model in North America. It is also worth pointing out that Algonquin has its roots in the gas pipeline and supply business, and that those “cleaner” plants usually burn fracked gas sold to them by Algonquin-related entities.

Contrary to the narrative put forward by Algonquin, Belco and now Mr Conyers, the real reason Belco wants to use gas is that it fits Algonquin’s overall business plans. Remember, too, that the price Belco may choose to pay for gas fuel will be passed on to Bermuda’s consumers in full essentially outside the rate structure.

All that aside, it also needs to be clearly stated that the specification of the Belco engines for gas fuel was a Belco mistake. There were never any assurances given to Belco to the effect that gas use would be permitted.

I would suggest that specifying gas-optimised engines was a simple act of arrogance on the part of Belco/Algonquin based on the belief that they would ultimately get their way. The “soot” problem could be easily solved by installing flue gas treatment equipment. This would be costly but not prohibitively so; it is routinely done on this class of engines both ashore and in marine service. It would be much less expensive than converting to gas fuel.

As to the cost, the Regulatory Authority, and the Government, need to be very clear that just as the specification of the engines for gas fuel was a unilateral Belco decision, so, too, the cost of mitigating that mistake must be borne by Belco and not recouped through the rate structure. If Belco is convinced that the best fix for the error is to burn gas, then Belco must pay for the switch and the ongoing extra cost as well.

I would stop short of suggesting that Belco would intentionally create the “soot” problem to put pressure on the RA to revisit the gas-fuel option. I would not stop short, though, of suggesting that Belco is dragging its feet and dissembling around the issue because the simple truth is that the more it drags on, the more times Belco — and apologists — get to voice the lie that gas is the only silver bullet. And then to get the Bermuda consumer to pay for the enormous, front-end cost of the gas conversion.

To be clear, the Bermuda consumer must not be required to foot the bill for the mistaken specification of these engines as optimised to burn gas. Whether the fix is to modify operations or burn “lighter” fuels, at higher cost, or heavily modify the engines and exhaust to cleanly burn heavy fuel oil or to clean the flue gas or switch to gas fuel — or several of the above — the entire cost must fall outside the rate structure.

The Government’s job is to use the tools at hand — the Operating Licence Conditions imposed by the RA and the Public Health Act — to make it more expensive for Belco to continue this pollution than to fix it.

They need to do this work. Quickly.

JAN CARD

Smith’s