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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