Caribbean Utilities Company reported annual operating income of US$28.4 million, a $1 million increase over 2017, as a result of higher electricity sales revenues.
The Cayman utility provider grew kilowatt per hour sales by 1 percent last year but also benefited from two base rate increases of 1.6 percent on June 1, 2017 and 1.8 percent on June 1, 2018.
The company’s net earnings of $26.8 million were $3 million higher than in 2017, amid lower finance charges and higher operating income. The operating result was partially offset by higher depreciation, and transmission and distribution expenses in 2018.
After the adjustment for dividends on the preference shares of the company, earnings on Class A ordinary shares were $25.8 million, or $0.78 per share compared to $22.8 million, or $0.70 per share in 2017.
CUC President and CEO Richard Hew said the company was pleased with the earnings growth even though sales growth was limited last year.
“Commercial and residential construction activity in Grand Cayman remained very active in 2018; however, sales growth was tempered by ongoing customer focus on energy efficiency and cooler weather as compared to 2017,” he said. “The company also experienced one of its most active years of construction as it continued to execute its Capital Investment Plan to put in place the modern infrastructure required to serve Grand Cayman as a leading destination today and into the future.”
Capital expenditures for the year totaled $58 million, with CUC making progress on the construction of two new distribution substations, investments into a new Supervisory Control and Data Acquisition system and an upgrade to the central control room at the North Sound Plant.
Last year the company grew the share of renewable energy on its grid by 47 percent. At the end of 2018, CUC’s Consumer Owned Renewable Energy (CORE) program connected 343 customers with 4,917.14 kilowatts of renewable capacity, as well as BMR Energy’s (formerly Entropy) 5 megawatt solar plant.
The company aims to have 25 percent of renewable energy on the grid by 2025 and to meet the objectives and targets of the National Energy Policy over the longer term. CUC has also submitted an additional $77 million in proposed grid enhancement projects, including battery storage, for regulatory review.
“With the growing importance on environmental sustainability, we progressed in this area with a significant increase in the amount of renewable energy feeding our grid and the acceptance of our Integrated Resource Plan by the Office of Utility Regulation and Competition as a roadmap for the transition to clean energy,” Mr. Hew said.
The 2017 Integrated Resource Plan recommended a portfolio of 60 percent renewable energy and natural gas replacing diesel by 2037. CUC said it fully embraces this transition to cleaner energy such as solar and wind, with costs projected to be lower and more stable than today’s conventional diesel technology.
The electricity provider also launched a joint project with the National Roads Authority in 2018 to replace all street lamps with LEDs over the next five years.
The program, which has started in George Town, will see 7,000 new LED lights installed, which should reduce street lighting costs by an estimated 26 percent or approximately 3.78 gigawatt hours per year.
This would eliminate 195,000 imperial gallons of diesel that would otherwise be burned, and cut 5.2 million pounds of CO2 emissions.