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Let’s press pause on Belco’s fee increase – a statement by Scott Pearman MP, OBA Shadow Minister for Home Affairs & Legal Affairs

By October 13, 2023No Comments

In his speech made the day he became Opposition Leader, Jarion Richardson observed that “blame is not a solution”.

Friday’s press conference by Deputy Premier Walter Roban on the impending increases in our electricity costs, was sadly short on meaningful solutions. Instead of solutions, the Minister seemed keen to point the finger of blame away from his Government, and towards Belco and the independent Regulatory Authority (RA).

Let’s step back for a moment.

Bermuda has some of the most expensive energy costs in the world. Many of our people are struggling to keep the lights on. So I am curious as to why Belco, the Island’s sole electric utility, decided that now was the time to seek the RA’s approval for a fuel adjustment rate increase.

At Friday’s press conference, the Government’s response was to shift blame towards Belco and the RA. At no point did the Government acknowledge that it too has a key role in this crucial issue.

We still do not know when the Government first became aware of Belco’s proposal or the RA’s decision. One would expect the Minister to have been informed about the rate increase well before it was announced – particularly given the size and impact of this particular hike.

The Deputy Premier is also Minister for Home Affairs, with specific responsibility for both Belco and the RA. Given his oversight role, it would be proper for Minister Roban to have had some prior knowledge of the rate increase. It would be bizarre if he did not know. Yet if he did know, then his vow on Friday to now investigate the rate increase seems a bit odd.

Belco has been consistently under fire since erecting its troubled North Power Station. Continuing emissions issues have Belco’s neighbours (rightly) up in arms. One solution on emissions — although admittedly not a complete one — would be to extend piped water in Hamilton to affected neighbourhoods.

This would help address health concerns around water for drinking and bathing. Belco could seize the role of ‘considerate neighbour’ and meet such costs, in full or in part, to help alleviate residents’ concerns. The OBA endorsed this solution in Parliament last February. We still await the PLP Government’s response on the feasibility and/or cost of extending piped water to homes near the plant.

As to the rate increase, recent finger-pointing by the Government has yet to rectify a proposal that will severely impact every resident of our Island.

The OBA of course recognises that each party has its own separate and legitimate function.

Belco is entitled to be compensated for the provision of electricity. Yet, as a utility, Belco’s right to a fee for its services is subject to regulation.

The RA as an independent regulator has a duty to regulate Belco. Yet decisions by regulators remain open to challenge, just like any other decisions impacting the public. And this particular decision will create undue hardship for many in our community.

What is the Government’s role and responsibility here? Surely, it must be to protect and promote the interests of the Bermudian people in a principled way?

In August 2022, the OBA publicly challenged Minister Roban’s lack of engagement with the Belco emissions issue. As Shadow Minister for Home Affairs, I contended the Minister should not “wash his hands” of the problem and leave it to others to fix. Government has a responsibility to protect and promote the public good.

It strikes me this same argument applies with the proposed Belco rate increase. Rather than seeking to redirect public anger away from the PLP Government – and towards Belco and the RA – the Government should actively intervene to help facilitate a negotiated solution to benefit impacted Bermudians.

To be fair to the Minister, an investigation into how and why the RA approved Belco’s request might reveal some additional information he does not already know. Yet an investigation into the RA’s decision does not go far enough. The better move is for Government to invite Belco to press pause on the proposed costs increases. All interested parties can then explore a negotiated solution. Belco should agree to delay the increase and enter into such discussions. If Belco were not to agree, the Government has the power to intervene, either judicially or legislatively, and impose a delay, giving Belco more time to reconsider.

Principled leadership requires finding solutions. Blame is not a solution. And this issue, sadly, illustrates the larger picture of financial burdens and general decline in our local economy. Failure to engage now with these proposed rate increases will only increase our already high cost of living in Bermuda.

We need a complete change in approach to the one we have now. We need to increase the inward flow of foreign capital. We need to increase job-creation with immigration reform, to attract job-creators. We need to reduce financial burdens on our struggling people. In short, we need a government that knows how to help Bermudians thrive. At the moment, so many are struggling just to survive.

Increasing the cost of electricity in Bermuda certainly will not help matters. It will only make bad things worse for those who increasingly find it near impossible to live on this Island.