Explanation of Fuel Adjustment Rate
With the approval of the Energy Commission, the Fuel Adjustment Rate¬†increases from¬†8.00 cents in February to 9.00 cents per kilowatt-hour sold for¬†meter readings taken on or after¬†March 1, 2017 and until further notice. BELCO does not profit when the fuel adjustment rate increases.
The Energy Commission sets the fuel adjustment rate every month based on a calculation that includes the cost of fuel and projected usage, and starts with a base cost of $30.00 per barrel of fuel. The cost of fuel for BELCO is made up of: the actual cost of the fuel purchased on the world market, plus transportation and a static Bermuda Customs duty of $31.79 per barrel.
As the actual cost of fuel changes on the world market, the fuel adjustment rate changes. World market prices fluctuate greatly due to the growing demand for fuel around the world, limited refineries to process crude oil, and the impact of political, economic and other events.
BELCO endeavours to minimise the cost to the customer by negotiating the best possible prices, purchasing when the market is low, selecting the most economical fuel and maximising plant efficiency.
The fuel adjustment rate is announced in¬†The Royal Gazette by the first day of each month.
Fuel Adjustment Rate, Year-on-Year Comparison
(cents per kilowatt hour sold)
Commercial Owners Excess Energy Rate