CUC rate hike just in time for summer

CUC-HQ-main

The Cayman Islands Electricity Regulatory Authority Board has approved a rate base increase of 1.8% effective 1 June for Caribbean Utilities Company customers.

As a result the base rate will be increased from $10.46 to $10.65 cents per kilowatt-hour.

On 2 April, CUC submitted an application to the ERA to review and approve a 1.8% rate base Increase in accordance with the Rate Cap and Adjustment Mechanism described in CUC’s licence.

The Rate Cap and Adjustment Mechanism is calculated using the most recent CUC audited financial statements to calculate CUC’s permitted return on rate base and a weighted average consisting of 60% of the Cayman Islands Consumer Price Index and 40% of the United States of America Consumer Price Index.

Upon review and confirmation of the CUC audited financial reports, the authority approved the CUC 1.8% rate base increase on 10 May which, as a result of 2012 inflation in both the Cayman Islands and the USA, the required rate adjustment in the CUC licence equates to a 1.8% increase.

According to a statement by the Electricity Regulatory Authority: “It is important for consumers to comprehend that this increase applies only to the CUC base rate which is being increased from 10.46 to 10.65 cents CI per kilowatt-hour. Since the base rate equates to approximately one-third of the typical monthly CUC consumer bill, the overall increase of the typical monthly consumer bill will equate to approximately 0.5% of the total bill.

“As per ERA Law, one of the main functions of the ERA is to monitor and regulate all licensees in a manner that promotes sustainable competitive practices; provides an opportunity for a fair and reasonable return to licensees; and protects the economic interests and well being of consumers by keeping tariffs and rate structures as low as can reasonably be achieved.”

An informational insert detailing how the rate change will affect the various consumer classes has been included in CUC June 2013 bills.


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21 COMMENTS

  1. When are we going to get net-metering so we can bypass these crooks with solar? This should be a no brainer for the new progressive government, unless of course, that is just a name.

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  2. Waiting for the PPM to roll back Mad Mac’s fuel tax. And while they are at it they need to do something about the cost to license a vehicle for a year. It is outrageouslly high which is why there are so many unlicensed vehicles on the road. Bring the price down and enforce the law!

    Sort it out PPM!

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  3. My friends, CIG has sold their soul to CUC a loooonnng time ago! Alternate energy is the only way to go! Turn off or even better unplug anything that is not in use. If you can afford it, invest in some solar panels to run things like your fridge and other appliances, swith to propane. Probably one of the only ways to survive until the contract with government and CUC is expired in about 20 years. Until then we will be paying all of our hard earned money to CUC.

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  4. Much ado about nothing. The base rate is being increased from 10.46 cents to 10.65 cents per kwh. For the average residential consumer who consumes about 1,200 kwh per month this will increase his/her monthly bill by 2.28

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  5. Yes, isn’t CUC sly.

    New electronic metering on new houses. Not the old spin wheel kind. And the new electronic meters are not net metered. So you cannot put solar panels on your house. Unless you want to request the net metering devices. Which I am sure, will cost you something.

    Otherwise, if you try to put solar panels on your house with non net metered meters. The meter does not roll back. So you get zero credit for putting electricity back into CUC’s grid.

    Awesome.

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  6. PPM cant do not a thing for us when it comes to CUC. Lets not forget it is PPM’s fault why no other company can come to cayman to sell power and CUC has the monopoly for another 20 years! Isnt it ironic how as soon as PPM is back in they start to inflate prices? The fuel tax was implemented by the previous government as a source of income, being that CUC is probably one of largest importers of fuel. The only how tax on fuel will be cut is if CIG finds another source to replace that income. CIG is broke people! Now Alden needs to stop living in a fantasy world and realize that cutting spending and the CIG work force is the only way or else say hello to direct taxation! Now we can really see how companies align them selves with certain political parties.

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  7. @ Undisclosed_345
    You are trying to politicise a non-political issue.
    Both the UDP and the PPM (and anyone who knows anything about the industry) agree that it is not feasible to have more than one distributor of electricity in an island this small. It would actually increase costs since fewer customers for each company would have to pay for the same infrastructure. Do the math: x/y will always be greater than x/2y.

    Rate review comes in June each year of each regardless of elections. It is based on a formula and has nothing to do with which govt. is in power. We’ve had years where there have been no increases and years where there have been small increases.

    In reality this is a small increase – about the cost of one litre of bottled water each month for most customers. If the tax increases on diesel are rolled back it will lead to a much more significant reduction in our electricity bills.

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  8. Maybe that is why they have stopped sending out postal bills to me? Anyone else have that problem? Don’t want to give me the bad news that my bills go from bad to really bad….

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  9. This is just rubbing salt in a bad cut for the average caymanian or even expat… yes it maybe 2CI more a month which equates to 25 CI a year that people would have in their pockets. So now someone is making xtra money at the expense of the small man
    I really don’t care who say all the inflation stuff.. it is just a false justification… I used to like this island but now we can see its designed for the rich to get richer…. i am glad i got like maybe 11 weeks again here and i did really love living here . However this Cayman system needs to check themselves so that in 20 or 30 years their kids will have a chance and not be ruled by a Anything Goes Admin. 🙂
    however have a great summer fellow readers

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  10. @classytraveling
    Obviously no one likes price increases in anything because it means less money in your pocket but the hysterical reaction to this small increase is completely out of proportion considering the much greater price increases that we meet in other areas that we accept without the barest protest. E.g. after Hurricane Ivan property insurance rates rose some 300%. They have not fallen since although it has been years since our last hurricane. Annual premimums are on average more than twice the CUC annual bill. But no one is screaming murder about this. Why is that? And please, don’t just give thumbs down explain why I am wrong to raise this point.

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  11. Mr. ANDYJAX, the reason people have a bigger problem with utility rate increases is because utilities (CUC) are granted a government monopoly. As such, they do not have to face competition. Therefore the free market is not determining the price. Hurricane insurance is offered by multiple companies, with no special pricing schemes allowed by the government. People feel better about paying for a product or service when they know they have a choice of providers. A choice of providers gives the purchaser the knowledge that they are paying a fair market price.

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  12. @throughthewire

    So you’re saying that so long as you have the illusion of market competition you are fine with price increases however large, but you are automatically irate about price increases no matter how small which are regulated by an independent regulator/mechanism simply because there is no competition? That is a pretty naive and irrational view.

    Don’t you understand that there are many factors which can distort market competition? That suppliers can act in collusion to maintain high prices because it benefits all of them? A classic example are the charges that banks impose.

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  13. Your original question asked why people are so sensitive to an increase in electric rates. I factually responded to that question. Now you’re ignoring the facts and jumping to unrelated issues. Since you’ve missed the point, I’ll restate; People don’t like or trust monopolies. Monopolies and corruption go hand-in-hand. Corruption is alive and well on these islands and people resent it and the organizations where it’s found. And, since you brought it up, market competition is not an illusion. Where competition exists prices are lower.

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  14. @throughthewire

    Huh? I am not ignoring ‘the facts’ and jumping to unrelated issues. I have directly addressed the points you raised by explaining why that is a naive and irrational stance to take. It is you who has missed the point. As I explained market competition can become an illusion where there are factors which distort competition. The idea that where there are multiple suppliers there is automatically perfect competition is naive. Collusion (or corruption, if you prefer) can exist there too. Obviously this is directly related. Read my post over again. This time s-l-o-w-ly.

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Comments are closed.