Updated: Jul 05, 2022 09:40 AM
Belco has imposed price increases (File photograph)
Electricity bills are set to rise after Belco was given permission to increase its charges.
The Regulatory Authority has approved a rise in the Fuel Adjustment Rate of about 6.5 per cent, although not all bills will go up by the same amount.
A spokesman for the energy company said: “This increase is as a result of rising fuel prices and a consequential adjustment to the Fuel Adjustment Rate.
“The FAR, which is approved by the Bermuda Regulatory Authority, reflects the total cost to deliver fuel to Belco’s central plant and comprises two parts – the fuel adjustment and Bermuda Government taxes.
“The fuel adjustment is based on the total cost of procuring fuel and includes shipping cost, supplier profit margin, local receipt, handling, storage and transport via pipeline from Ferry Reach to the Belco central plant.
“The second part of the FAR comprises two separate government taxes. The Government charges $31.79 per barrel of fuel in addition to a tax of 40 cents per barrel of fuel, which provides funding for the St George’s Unesco World Heritage Site.
“The FAR is calculated quarterly and rises and falls as the purchase price of Belco’s fuel rises and falls. The quarterly adjustment in the FAR is published by the RA and reflected in customers’ bills in the next billing cycle.
“The FAR is a cost recovery mechanism and all cost increases as well as any savings due to a reduction in Belco fuel costs are passed on to customers.”
The Belco rise, which came in on July 1, increased energy prices to 20.12 cents per kilowatt-hour, a rise from the previous FAR of 18.90 cents per kilowatt-hour sold for the April to June 2022 quarter.
The way the cost of electricity is calculated is a complex and multi-factored one and Belco was unable to give an average price rise figure when contacted by The Royal Gazette.
Although the official inflation rate is 2.5 per cent, the energy increase comes after it emerged that some food items have increased in price by almost 30 per cent in the past year.
The Government’s Department of Statistics said the price of some meat, fresh fruit and vegetables rose sharply in the 12 months up to March this year.
In addition, Lindo’s has said that food prices were likely to go up by 8 per cent as food bought at lower prices and stockpiled runs out.
A shortage of properties is also pushing up rental prices, with hikes of as much as 30 per cent in the past 12 months, according to realtors.