The Fuel Adjustment Rate (FAR) is used to recover the costs of fuel incurred in electricity generation and will be a pass through of all reasonably incurred costs to the customer within the retail tariff methodology. Currently, the Regulatory Authority of Bermuda (the “Authority”) reviews and approves the FAR monthly. However, the Authority is in the process of revising the FAR methodology through the retail tariff methodology.
In accordance with section 35 of the Electricity Act 2016 (“EA”), the Authority shall determine the retail tariff in accordance with the methodology set by general determination and in accordance with the principles set out in this section.
In particular the tariff shall seek to enable the TD&R Licensee to generate a total revenue that recovers reasonable costs of service incurred in achieving the service standards and, in particular, the reasonable costs in respect of fuel procured for generation and other costs.
The Authority is currently consulting on the retail tariff methodology, which includes the FAR methodology and will update this section of the website once the Authority issues a general determination setting the methodology.