Electricity costs going up

Government to suspend CUC rebate

CUC

CUC

The government will suspend its fuel rebate arrangement with Caribbean Utilities Company, which will lead to higher electricity costs for residential consumers.

The action will not affect commercial customers in any way, but it will lead to a higher fuel factor costs for all residential customers. For those consuming 1,500 kilowatt hours of electricity or more a month, the increase to their bill will be CI$45.

The action is part of the government’s strategy to reduce expenses to deal with its operating deficit without affecting the terms of employment of civil servants.

Leader of Government Business McKeeva Bush said the suspension of the rebate programme would save the government $6 million.

‘[The CUC rebate programme] was done at a time when the cost of fuel was tremendously high,’ Mr. Bush said. ‘The cost is lower now, so the rebate should be eased up.’

Mr. Bush said the previous People’s Progressive Movement administration caused the situation that required the action.

‘They left the country in a serious economic crisis and we have to do these kinds of things now,’ he said.

The government announced last week that it would not make any active attempt to remove any civil servant jobs or reduce their salaries. It said it would, however, try to reduce the number of civil servants through attrition and by the non-renewal of contracts for non-Caymanian civil servants.

Mr. Bush said expenses had to be cut in some way and that the government would not implement an income tax or increase any fees.

‘We have to find funds, and that’s why we’re doing things like this,’ he said.

CUC President and CEO Richard Hew said he was unaware of the suspension of the rebate programme, but he wasn’t surprised by the action.

‘I figured it would be something they would look at,’ he said.

CUC gets a 20-cents-per-Imperial-gallon rebate on all the fuel it consumes. The rebate is then directed to residential consumers on the basis of three cents per kilowatt hour, up to a maximum of 1,500 KwH usage per billing cycle. Residential consumers using 1,000 KwH per billing cycle were saving $30 per month, while those using 1,500 KwH or more per billing cycle were saving $45 per month.

Mr. Hew said the suspension of the rebate programme would not affect CUC since it didn’t benefit from the rebate programme.

Electricity Regulatory Authority Managing Director Phil Thomas said the fuel rebate programme was not a part of CUC’s licence renewal agreement signed last year.

Although Mr. Thomas could not confirm the suspension of the rebate programme, he said it was a decision taken by Cabinet when oil was priced about $147 per barrel and that it would only take another decision by Cabinet to suspend the rebate programme.

CUC crews get ready to roll out of the North Sound Road plant. Photo: File

‘[The CUC rebate programme] was done at a time when the cost of fuel was tremendously high. The cost is lower now, so the rebate should be eased up.’ – Leader of Government Business McKeeva Bush

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