Disturbing contradictions and interesting opportunities have been uncovered during the first year of operation for Belco Energy Services Co. Ltd. (Besco), according to Besco parent, Belco Holdings Ltd.

Belco's annual report contains a statement to shareholders, signed by retired-chairman, W. Neville Conyers, and president and CEO, Garry Madeiros, indicating that while business people talk about the need to become more competitive, few are willing to `put their money where their mouth is'.

The company said, "On the surface it appears Bermuda's business community is in total agreement that there needs to be greater efforts made to become more efficient, reduce operating costs and improve our competitive position.

"Without question there is a genuine concern about the cost of operating in Bermuda.

"However, beneath the surface, our experience with Besco indicates it may take some time before even those who have been most vocal are ready to walk the talk, so to speak.

"Our comments are based not only on our Besco experience, but rather on what appears to be a general reluctance to commit investment dollars to energy efficiency initiatives, be it with Besco or any other company.'' And planning for the future, said the company, is more important with the revival in new development and construction projects, because the company is now projecting an annual growth in electricity demand of 2.4 percent over the next ten years.

The statement said, "This resurgence of development makes it even more important that the community look beneath the surface to find ways to ensure the Island is benefiting from the most energy efficient equipment, supported by an infrastructure which will go beyond today's requirements to provide for the needs of the future.'' The communication also said that as the demands for electricity grow, Bermuda needs to allocate land for the purpose of future electricity generation.

"Long term electricity generation requirements, provisions for the transmission and distribution of electrical power and future telecommunications needs must be considered essential elements of any future development plan,'' the company said.

But other parts of the annual report show that Besco, in its first year, identified total potential energy savings of $1.2 million per year for 41 customers, including $577,000 in potential energy savings which would benefit the tourism industry.

But at the time of the writing of the report, less than 15 customers had committed to energy savings recommendations, and only one tourist property had begun taking action to reduce its energy costs.

It said, "We recognise that investing in energy efficiency equipment may not offer the same short-term satisfaction which can be gleaned from many other commodities competing for the same investment dollars.

"On the other hand, listening to the business community, it is obvious many of their recent investments are not addressing their cost concerns.'' In many cases, new equipment requires payback periods between two and five years, and Belco has offered shared savings and financing options to some customers.

Master energy plans developed by Besco identify potential savings for lighting retro-fits, heat ventilating air-conditioning, refrigeration, motors and hot water supply. Besco also offers schemes that provide other benefits.

The report notes: "An example is the recommendation for the use of laundry ozonation within hotels and other large institutions which can provide up to 90 percent savings on water heating, reduce soap consumption and speed up the time it takes to get laundry done.''