CUC deal defended

The People’s Progressive Movement Government on Friday defended a deal struck with Caribbean Utilities Company last year, saying it had delivered lower electricity bills to those consuming an average amount of electricity.

Minister responsible for Infrastructure Arden McLean said electricity bills would have been higher again if not for the deal the Government struck with CUC in December.

‘Despite the huge increase in fuel costs, the average residential consumer is still seeing a lower bill, due to the lower base rate (per kilowatt hour) and the fuel rebate from Government,’ he said in a statement to the Legislative Assembly.

But with fuel prices expected to rise further in the coming months, Mr. McLean said the PPM Government is ‘reviewing all options’ with a view to further rebates, provided they result in direct and meaningful savings to consumers.

The Minister was responding to a consumer-initiated petition circulating in the community that demands fair prices from CUC. He said the petition made certain assumption and assertions that, if left unanswered, could lead the public to believe that the licence negotiations were not conducted in the best interests of the consumer.

In December, a CUC review put average residential electricity consumption at 824 kWhs per month.

Mr. McLean said a residential consumer using that amount of electricity in December would have received a bill for about $244, while in May, that bill would have been just under $236, notwithstanding oil price rises that have pushed the cost of a barrel of crude oil during that period from US$90 to $140.

‘Indeed, we were all fortunate that the licence negotiations were concluded before prices reached this level,’ Mr. McLean said.

The licence negotiations resulted in the removal of CUC’s Hurricane Recovery Surcharge and fixed the base rate CUC charges consumers for electricity at just over 10 cents per kWh, down from almost 16 cents. The deal also introduced a fuel duty rebate to consumers of 20 cents for each gallon of diesel fuel CUC consumes, which amounts to 40 per cent of the import duty charged on each imperial gallon of diesel, Mr. McLean said.

The deal added to electricity bills a new licensing and regulatory fee to fund the creation of an Electricity Regulatory Authority. That fee only applies to consumers using more than 1,000 kWhs of electricity per month.

Leader of the Opposition McKeeva Bush responded by saying CUC should never have been allowed to introduce a Hurricane Recovery Surcharge in the first place.

‘No other company got that kind of assistance,’ he said. ‘All companies suffered like CUC; some went under, some are still reeling today.’

Mr. Bush told the house he has received many calls recently from constituents asking for financial assistance to meet their electricity bills, adding that most were people that hadn’t previously asked for help.

Mr. Bush called for $3 million to be moved from other government programmes to finance the creation of a fund to assist low income earners with meeting their electricity bills.

‘If I had produced this budget, knowing all we know about CUC, I would have put money in this budget to specifically help people with their electricity bills,’ he said.

‘This is not going to get better any time soon, and we know it’s already bad at this time.’

Mr. McLean used the opportunity to defend the team that had negotiated the deal with CUC. They include commercial lawyer Olivaire Watler, litigation lawyer Sammy Jackson, Julius Baer Managing Director Charles Farrington and World Bank Consultant Winston Hay of Jamaica.

Noting radio talk-show criticism of the team, Mr. McLean said the group was the best talent possible for the job. ‘I would put them up against anyone in this country,’ he said.

He also lashed out at criticism he has heard about Arden McLean ‘being the CUC man’ – a reference to the fact he used to be a CUC employee.

‘This is my third employer,’ he said. ‘The previous two have no reasons to believe I was unfaithful to them just as the people of this country have no reason to believe I have been unfaithful.

‘This is a business, buddy,’ he continued. ‘When I have to sit down across the table from someone, the only people I am thinking about are the people of my country.’

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