under the Clean Air Act, and has told government to change its policy.

The electricity provider has argued for more than a year that the licence period should be extended to five years.

But it is unlikely that will happen soon, because the company still has not yet reached a point at which it is completely compliant with the requirements of the Act.

The first licence under the legislation was granted in May 1996 and expires at the end of this month. The 18 month period was established because it was exactly a half-way point to the expiry of the three year grace period.

By April 1999, Belco will be required to be completely compliant, and it appears unlikely that five year licensing can occur until that time.

In a quarterly report sent out yesterday to shareholders, Belco president and CEO, Garry Madeiros, declared: "As it took the Environmental Authority over two years to review the materials submitted in the application for our initial licence, we feel the licence needs to be valid for a longer period.

"In North America, the average licensing period for power stations is five years. We will be seeking the same for Bermuda.'' The company spent more than a quarter of a million dollars in making its first application to the Environmental Authority, which was delivered in 1994.

When it was approved for 18 months, the Authority made the point that it was half of the time period to the date when total compliance would be required.

The 18 months they said would give officials a chance to see at the end of it how compliant Belco had become.

There seemed to be an indication then that Belco could only win a second 18-month licence at this time.

Environmental engineer Dr. Tom Sleeter said Belco was making significant progress toward becoming compliant with the regulations to the act.

He said, "Once the compliance period is done, it likely that it will be reconsidered.'' Meanwhile, in other matters, Mr. Madeiros noted that as part of the re-licensing application, results of air quality monitoring that began in July, 1996 will be compared with data collected by Belco before the Clean Air Act in 1988 and 1989.

He said, "The latest results will show significant improvements in the air quality around the plant which have been brought by the retirement of several older engines, the installation of new engines with a taller stack, a move to lower sulphur fuel and the closure of the diesel waste heat recovery plant.'' Belco this summer became the first accredited training centre in Bermuda for both the Institution of Electrical Engineers and the Institution of Mechanical Engineers. Belco engineers who have not received their professional status can train and prepare themselves to obtain their Chartered Engineer designation, a globally recognised qualification.

Appliance sales at subsidiary Bermuda Gas & Utility Co. are up 17.1 percent for the first eight months of the year, when compared to the same period last year. Service billings are also up 10.1 percent. Gas volume sales through August are about the same as last year.

Subsidiary Belco Energy Services Ltd. took on its first general manager this summer and is involved in projects that include the re-development of the engineering plant at King Edward VII Memorial Hospital.

Another subsidiary, Quantum Communications Ltd. (the former North Atlantic Telecommunications Ltd. acquired by Belco and Cable & Wireless earlier this year), is in the process of obtaining a licence from the Ministry of Telecommunications.

Quantum intends to provide data services in the City of Hamilton before the end of the year and voice services by the second quarter of 1998.

And Belco Properties Ltd., the holding company for non-utility related properties, is currently negotiating with government over the sale of the Ridgeway property on Berkeley Hill.

GARRY MADEIROS -- Make licence valid for longer period.