The proposed site for the North Power Station development that would involve the installation of three 14-megawatt diesel engines. *Photo by Simon Jones
The proposed site for the North Power Station development that would involve the installation of three 14-megawatt diesel engines. *Photo by Simon Jones

FRIDAY, MAY 18: The future of BELCO’s North Power Station development was hanging in the balance last night.

Environment Minister Marc Bean issued a strong statement saying the cost of the new plant should not be borne by the public.

He was backed by opposition Senator Mike Fahy who said the island needed to reduce its dependence on BELCO and look for other more sustainable energy sources.

But BELCO bosses maintain that the Minister’s decision not to allow a rate increase, put reliability of electricity supply in jeopardy.

Yesterday Mr Bean said: “Our approach balances the need for a new power generation plant with economic concerns. 

“The decision was made with the interests of the Bermudian people at heart.

“In fact, BELCO itself recognized the difficult economic times when they elected in 2011 not to increase rates as per the rates approved back in 2007 by the former Price Commission.

“This speaks to BELCO’s knowledge and sympathy for the economic hardships suffered by the rate payers, and unfortunately that hardship still continues.

“I am confident that we can protect the Bermudian people from harmful rate hikes during the economic recovery while moving forward with the new power plant.”

The Ministry statement added: “The Ministry would like to first be clear that it fully supports
BELCO’s plans to install a new power plant.

“However, with Bermudians hurting from high cost of living, the rate increase, in both the opinion of the Minister and the Energy Commission, simply cannot at present be borne by the public in its entirety as per BELCO’s original submission.”

The North Power Station development would involve the installation of three 14-megawatt diesel engines in the new power station at a cost of $70 million.

BELCO President Andrew Parsons said yesterday: “BELCO cannot build the North Power Station unless the company receives a rate that will support the debt financing of $70 million required to build the power plant.

“The power plant is not BELCO’s only large capital project obligation.

“Over and above the $70 million required to build the new power station, we have allocated in excess of $20 million for necessary capital projects in other areas, particularly the electricity transmission and distribution system.

“This is not unusual, as BELCO traditionally invests between $20-$30 million annually on electricity infrastructure and support systems.”

A statement released earlier this week by Ascendant Group Limited, which owns BELCO, said: “The introduction of these engines is essential to meet Bermuda’s future energy demand, as three less efficient existing engines are scheduled for retirement in 2013, as are all East Power Station Phase I engines in 2017.

“If the Minister’s decision stands, then the North Power Station project will not proceed, leaving BELCO with no choice but to continue to meet Bermuda’s future energy demand with older, less efficient and less reliable generation plant.

“The rejection of the rates increase will also have an impact on other capital projects.”

Meanwhile Senator Fahy said that the OBA and the PLP were singing from the same hymn sheet on the issue.

He added: “It is right that the rate increase request was rejected. BELCO bills are high enough right now.

“The problem actually is however larger than a simple rate increase rejection. It actually goes to the entire question of how energy is produced in Bermuda.

“It is important that we become less dependent on inefficient fossil fuel electricity and concentrate on renewable energy.

“Whilst Government has introduced incentives we need to consider making it mandatory with new builds to have solar panels and other such renewable energy sources.

“The planning code needs a substantial revamp to help reduce the carbon footprint.

“The OBA believes that much more can be done to harness the resources on our doorstep through wave energy, wind and solar power, which can reduce our dependence on BELCO.”