Friday looms as the deadline for responses to Electricity Regulatory Authority requests for interested companies to file their qualifications to build, own and operate new diesel power facilities by April and May 2016.
Following receipt of statements of qualifications by interested parties for the 36 megawatt generation, the ERA will review and decide which parties are qualified to receive request for proposals on the project.
The Caribbean Utilities Company, monopoly provider of commercial electricity to Grand Cayman, said it would bid for the generation contract, while the previous bidder, Dart Realty’s engineering arm DECCO, did not answer by press time on Tuesday, although in February the company won the authority’s nod for a 36MW generation project.
CUC spokeswoman Pat Bynoe-Clarke declined to comment on the bid, but confirmed the company’s interest: “It is inappropriate for us to comment specifically on our bid or any other details regarding the bid process, but I can confirm that we will submit a bid as required by our license.”
While CUC’s transmission and distribution license from government obliges the utility to tender for any new generation project, it also potentially preserves its position as the current monopoly provider.
“In response to a [request for proposals] for new capacity, the licensee will provide a bid to the authority in a format comparable to the bids prescribed in the RFP for evaluation purposes and to compete with bids from other bidders,” the document says.
Should CUC prevail against competition, the license allows the company to include the cost of its bid in the electricity rates it charges to consumers. Should CUC prove the sole bidder, the license allows it to include the cost of the new facilities in consumer charges.
“If the results of the solicitation are not acceptable to the licensee or any bidder(s), the aggrieved parties will have recourse to the dispute resolution procedures,” the document says.
The ERA’s February selection of DECCO – and rejection of CUC – for the 36MW contract, was subsequently canceled outright by the authority in the summer, citing delays and “declining consumer demand for power.”
Charles Farrington, newly appointed managing director of the ERA, told the Caymanian Compass that the new tender was not a resurrection of the earlier competition.
“New generation is generally required when the utility foresees future growth in electricity peak demand and/or as a result of upcoming retirements of existing generation assets,” he said, citing a formal “Certificate of Need,’ filed by CUC and describing its assessment of the situation.
The certificate, he said, “is driven by both factors.”
“Whilst this Certificate of Need would clearly have been impacted by the cancellation of the previous solicitation referred to, this Certificate of Need has somewhat different requirements and stands completely independent of the cancelled solicitation,” Mr. Farrington said.
While he did not describe CUC’s projections, the October certificate itself cited only the looming retirement of four of the company’s diesel generators and did not mention increased consumer demand.
“These programmes have been taken into account in CUC’s forecast of load growth over the next five years,” the certificate said, signed by both CUC President and Chief Executive Officer Richard Hew and Mr. Farrington. “Scheduled retirements through 2016 include Unit 16 in April 2014, Unit 14 in April 2014, Unit 15 in April 2016 and Unit 19 in July 2016.
“CUC is not planning to extend the useful life of these generating units at this time,” the document said.
The Friday deadline, however, is only for interested companies to inform the ERA of their international qualifications to complete for the project, which calls for 18MW to be operational by April 1, 2016 and the other 18MW by May 1, 2016.
“This request for Statement of Qualifications is to pre-qualify potential bidders for a new competitive solicitation run by the ERA in response to a new Certificate of Need submitted by CUC in accordance with its Transmission and Distribution License and the regulatory framework,” Mr. Farrington said.
“We are planning for the RFP to be available in January 2014.”