Caribbean Utilities Company has announced a 0.1 percent increase in the company’s base rate, adding approximately 11 cents to typical monthly bills.
Jim Knapp, managing director of renewable energy contractor Endless Energy (Cayman) Ltd and former vice chairman of the Cayman Renewable Energy Association, asked why the rise was necessary at all, however, observing that the company earned in excess of $25 million last year.
“So why do they need more?” he asked. “The Electricity Regulatory Authority has said that if solar energy costs even a fraction more than diesel-generated electricity for the ‘little guy,’ they won’t allow it, but they seem to let CUC raise rates every year.”
The one-10th of a cent per kilowatt hour increase, would add about $50,000 per year to the company’s revenues, CUC confirmed.
President and CEO of CUC Richard Hew said the rise would support “ongoing investment in infrastructure necessary to provide safe, reliable and cost-effective electricity service to all consumers.”
CUC’s base rates, he said, “remain at – or below – most other utilities in the region. More significantly, the overall rate, including the fuel-cost charge rate, is currently at an eight-year low, assisted by the decline in world fuel oil prices and a reduction in government fuel duties.”
He concluded with an appeal to the utility’s 28,000 customers to reduce consumption: [W]e continue to encourage our customers to become as energy efficient as possible, particularly for the upcoming summer months when temperatures and air-conditioning use normally rise.”
Electricity Regulatory Authority Managing Director Charles Farrington predicted the small increase was unlikely to affect most consumers, and, like Mr. Hew, pointed to decreasing costs for oil and the end of government fuel-import duties.
The declines had contributed to a stabilization of electricity prices in the last two years, he said, and the mechanism for determining price rises was “intended to push CUC to constantly improve its efficiency.”
“The ERA,” he said, “was pleased to see that CUC had managed to maintain its return on [its] rate base whilst continuing to ensure that the island has robust generation, transmission and distribution resources deployed.”