Column contained incorrect math

In your Friday, 24 February edition under Local News, there was an article titled, “Ask the Solarman,” which contained inaccuracies in respect of the Cost Recovery Surcharge being applied by CUC to the monthly bills of electricity consumers.

In the article, Mr. Dave Sawchak states, “CUC was granted a 4.6 per cent increase per year for three years for Ivan’s recovery. That amounts to an increase of 13.8 per cent over that period. That means if you are paying $500 per month for electricity, you will be paying $569 per month before the increase of fuel adjustment is added.” This information by Mr. Sawchak is not correct as I have outlined below.

In your 21 July 2005 issue, it was accurately reported that CUC had implemented a Cost Recovery Surcharge of 4.7 per cent per year for approximately three years to recover a portion of the expenses incurred from Hurricane Ivan.

CUC also agreed, without prejudice, to freeze its basic rates through July 2008.

The CRS is not applied as a percentage increase based on the total amount of a customer’s bill, but rather is applied based on the kiloWatt-hour consumption and amounts to less than one cent per kWh. Therefore, to keep matters simple, we will use the $500 monthly bill which Mr. Sawchak referred to in his article.

This amount per month reflects a customer whose electrical consumption is approximately 1,782 kilowatt hours. Even with the fuel adjustment applied and using the amount of 11 cents, which was applied to bills in January 2006, the customer would only see an increase in the bill of approximately $13.35 (1,782 kWh x $0.007491 = $13.35).

This monthly surcharge amount is significantly less than that which Mr. Sawchak is suggesting would accumulate on a monthly bill of $500 and which would fall away after approximately three years.

Over a 36 month period, he is implying that a customer’s bill would increase to CI$569 per month when in fact the bill amount would remain consistent at $513.35 if the customer’s consumption remained in the region of 1,782 KiloWatt hours.

And lastly, whereas we support alternate energy sources and the energy efficiency concepts that Mr. Solarman is promoting, Mr. Solarman is also using his column to promote sale of his own products and he has a moral if not legal obligation to avoid misrepresentations that could lead consumers to make investment decisions they otherwise would not have made.

We thank you for this opportunity to set the record straight. We also encourage any customers who may have inquiries regarding the cost recovery surcharge and how it is calculated on their monthly bills to contact our Customer Service Department at 949-4300.

Caren A. Thompson-CUC Manager Corporate Communications

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