Warm weather and more customers benefited the Caribbean Utilities Company in the first half of 2014, CUC reported in its second quarter results.
The electricity company’s second quarter net earnings of $5.7 million remained relatively unchanged compared to the second quarter 2013, as higher electricity sales revenues were offset by higher consumer service and maintenance costs, according to CUC.
However, net earnings for the first six months of the year increased by $0.6 million to $9.2 million year on year, again based on a growth in electricity sales revenue that was partially wiped out by higher consumer service and finance charges.
CUC’s sales increased 0.2 million in kWh in the second quarter and 5.5 million in the first six months of 2014 relative to the same periods in 2013. Sales totaled 275.2 million kWh for the first two quarters of the year.
The period was positively impacted by warmer weather and an increased number of customers compared to last year, CUC said.
After the adjustment for dividends on the preference shares of the company, earnings on class A ordinary shares for the second quarter 2014 were $5.6 million, or $0.20 per class A ordinary share, in line with the same period last year.
In June, the company increased its base rates by 1.5 percent under the rate cap and adjustment mechanism, following a cost of service review that was approved by the Electricity Regulatory Authority. The 1.5 percent rate adjustment consisted of a 1 percent reduction of CUC’s base rate for residential customers, a 2.8 percent increase for general commercial customers and a 1.1 percent increase for large commercial customers.
The company, which provides electricity to Grand Cayman under exclusive electricity generation, transmission and distribution licenses, secured during the second quarter the supply of 7.5 megawatts of temporary mobile generation following the retirement of 17.5 MW of generating units.
This temporary generation will complement existing generation and help to ensure continuity of supply until the installation of the firm capacity, CUC said.
CUC is one of several bidders seeking to replace this capacity and meet new demand, in a solicitation process launched by the ERA. The winning bid is expected to be announced soon.
Also during the second quarter, CUC started initiatives that aim to improve customer service by offering additional off-site bill payment locations and by improving its Pay-By-Telephone service. This included additional resources for the company’s customer contact center to speed up email and telephone inquiry response times.
In addition, the company targets the completion of its Advanced Metering Infrastructure project by the end of the year. About 8,000 customers already have the new meters which provide real-time consumption information, make meter reading more efficient and enable other services such as pay-as-you-go options that will allow customers to better monitor and control electricity consumption, CUC said.