BELCO Bills: Understanding The Charges

Published on
October 4, 2023

In this article, you will learn about the 4 main components on your BELCO bill and what each section means in simple terms. Read on to learn more.

What are the components of my BELCO bill?

A graphic showing the components of a BELCO bill.
Click on image to enlarge

Typical BELCO bills (click link to view graphic) are made up of 4 components, which equal your “Total Billing Charges”.

The 4 components include:

  1. Usage Charges are the total costs BELCO is allowed to bill to a consumer for the amount of electricity used (kiloWatt hours or “kWhs”) during a billing period, which is also known as the Retail Tariff. These charges are divided into 3 tiers, which are calculated based on your personal electricity usage (consumption) habits.

    The 3 tiers of Usage Charges are:
  • Tier One, or the first 250 kWhs, which is the lowest rate and provides incentives for consumers to reduce their electricity usage (consumption) as much as possible to keep your total Usage Charges down;
  • Tier Two, or the next 250 – 700 kWhs, which is billed at a rate that is approximately 78% higher than tier one; and
  • Tier Three, or over 700 kWhs, which is billed at a rate that is approximately 56% higher than tier two.
  1. The fewer kWhs of electricity you use each month, the lower the total Facilities Charge will be on your BELCO bill. The Facilities Charge includes BELCO’s costs for owning, maintaining and operating their power plant and equipment. It allows BELCO to recover some of their operating expenses for what it costs to produce and distribute electricity to consumers. The Facilities Charge is calculated based on your average daily kWhs used (consumed) over the previous year. It is reviewed on a monthly basis and BELCO uses your annual rolling average to update the Facilities Charge that is applied to your monthly BELCO bill.
  2. The Fuel Adjustment Rate (FAR) fluctuates with global fuel prices and is assessed and adjusted by the RA on a quarterly basis (every three months). The FAR is approved by the RA and allows BELCO to recover what they spend on fuel used to produce electricity. It is billed to consumers at net cost, meaning that BELCO does not make a profit on the FAR. The FAR is is made up of two parts: 1) the fuel adjustment; and 2) Bermuda Government taxes that BELCO pays on the cost of fuel used to produce electricity at their power plant.
  3. The fewer kWhs you use each month, the lower the total Regulatory Authority Fee (RAF) will be on your BELCO bill. The RAF contributes to the RA’s operating expenses for regulating the Electricity Sector, including projects like developing renewable energy. As of October 2023, the RAF is currently billed at just over half a cent (one half of a penny on the dollar) per kWh, or $.00545 per kWh.