Data used to calculate electricity rates is being “reforecast” after legislation tabled in the House of Assembly slashed a customs duty on fuel for energy by 60 per cent.

Belco said today that the base rate increase announced last week would not change but that the tax reduction would result in a lowering of the fuel adjustment rate.

The update came after the Customs Tariff Amendment Bill 2024 was tabled in the House of Assembly on Friday to mitigate the impact of a rise in electricity bills to come into effect for meters read on or after August 1.

Belco said last week that the rate increase, which came after a lengthy collaborative evaluation with the Regulatory Authority, was in keeping with hikes in similar jurisdictions and provided the company with “the ability to continue offering a safe and reliable supply of electricity”.

Shelly Leman, the managing director for transmission, distribution and retail, said this afternoon: “In accordance with Belco’s obligations under its transmission, distribution and retail licence, any change in rates must be approved by the Regulatory Authority of Bermuda.

“There is an established process to determine the fuel adjustment rate and Belco is reforecasting data based on the recent changes to legislation to submit to the RA for consideration with an aim of implementing an amended FAR on August 1, 2024.

“The previously announced increase in the base rate will not change. However, the reduction in the government tax will cause the fuel adjustment rate to be reduced.

“The estimated impact on customers’ total bills, reflecting the reduced tax, will be shared with the public once the RA has approved the new rate.”

She added that, after approval, all information about the change would be posted on the company’s website.

Belco said last week that it was not immune to the challenges presented by a “global inflationary environment” and must continue to invest in the grid and other infrastructure.

The company submitted projected operational costs and expenditure for 2024 and 2025 to the RA for consideration and approval.

Approved plans related to ongoing investment in grid reinforcements “and other projects that ensure reliability of supply to customers”, the company explained.

A spokesman said then: “The resulting increase is on base electricity rates and affects the energy charge and facilities charge on your bill.

“As a residential customer, this means the more energy consumed by a household, the more charges will be incurred.”

Speaking before the tax reduction went before legislators, he said that average household users would see increases of about $27 to their monthly bill.

A spokesman for the RA said today: "The Regulatory Authority of Bermuda acknowledges the Bermuda Government's recent initiative regarding the energy tax cut.

“As an independent regulatory body, the RA is dedicated to following the methodologies established by legislation to ensure a thorough evaluation of any changes affecting utility rates.

“The RA supports the potential benefits this tax cut will bring for Bermuda's electricity consumers and is committed to efficiently facilitating this process in alignment with our regulatory framework.”

Scott Pearman, the Shadow Minister of Home Affairs, claimed on Sunday that the duty reduction was “a cut in Belco’s tax”.

He said that if David Burt, the Premier and Minister of Finance, was “going to claim victory here, he must state what reduction has he actually won for Bermudians”.

Mr Pearman added that Bermudians should ask: “What cost savings has the current Government actually negotiated for the people of Bermuda?

“Does this tax cut for Belco mean the utility will now reverse its planned August 1 price increases?

“Will there be huge reductions on everyone’s electricity bills on August 1 rather than the announced cost increases?

“How and when will the PLP’s tax cut for Belco get passed along to consumers?

“What will this cut in Belco’s fuel taxes achieve beyond handing taxpayer money back to Belco?”

In an opinion piece last week, Mr Pearman underscored the need to balance the rise in Belco rates.

Mr Burt, who tabled the legislation on Friday, said that the move was to keep the public from dealing with an unaffordable increase in electricity bills.

He also called Mr Pearman’s comments “a divisive, false and hypocritical attack on the Government for taking steps to protect Bermudians from a rate increase that many of us can't afford”.

The Premier said: “On Friday, the Opposition Leader joined me in calling for unity in our community as the House of Assembly closed for the summer.

“A few days before that, the Opposition called on the Government to reduce fuel taxes to offset an increase in electricity costs.”

He added: “The fact is, the OBA showed us how they would deal with Belco increases during their time in office by doubling the tax on Belco fuel from 10 cents to 20 cents, adding financial burdens on working Bermudians.

“We reversed this increase and reduced the tax on fuel to 8 cents to provide relief to Bermudian consumers.

“The rollback of OBA taxes and our latest move to support our people are part of how we govern in the interest of working people, which includes cutting payroll taxes for 86 per cent of Bermuda’s workers and all local businesses while increasing taxes on higher earners, which the OBA opposed, [and] freezing healthcare premiums for the third year in a row, saving policyholders $540 annually, which the OBA spoke out against.

“We froze gasoline prices, saving families from paying hundreds more each year.

“Our Government has consistently taken action to reverse the OBA’s tax increases on working people, fought against the global rise in the cost of living and worked to mitigate the impact of rising electricity prices.

“It is not enough for an Opposition to flip-flop and criticise for political reasons. They must also come forward with solutions.”