Caribbean Utilities Company reported higher earnings on the back of a 4% increase in kilowatt hour sales, lower transmission and distribution costs and lower finance charges. The Toronto Stock Exchange-listed utility recorded net earnings of US$4.5 million in the first quarter 2019, about $1.8 million more than during the same period last year.
Earnings figures were also impacted by a $0.6 million shortfall following the implementation of the demand rate in the first quarter of last year.
Cayman’s only electricity provider spent a total of $11.9 million on capital expenditures, which included the new Seven Mile Beach substation. This represented a $2 million increase compared to the same period in 2018.
The new substation will increase safety, system reliability and resiliency and will accommodate load growth within the popular Seven Mile Beach tourist area for the long-term future, CUC said.
Citing an estimated 3.6% increase of Cayman’s GDP in the first nine months of 2018, figures released by the Cayman Islands Economics and Statistics Office in March, CUC said economic growth supported a 2% growth in the number of customers to 29,945 in the first quarter.
In addition, the average kWh usage by residential and commercial customers increased during the period.
President and CEO Richard Hew said the company was “off to a good start in 2019 with earnings growth, improvement in reliability of service to customers, progress on significant capital projects and an increase in the amount of renewable energy on the grid when compared to the same period last year”.
The company said it had improved its reliability per customer by 33% over the same period in 2018 with the Average Service Availability Index (ASAI), the percentage of time power was available to customers, at 99.98%. This equates to an average service interruption during the first quarter of less than 30 minutes per customer.
This was in line with the company’s goal under its Reliability 2.0 initiative to attain 2 hours or less of total annual outage time per customer, CUC said.
The amount of renewable energy on the CUC grid increased to 4.3 million kWh between January and March, compared to 3.5 million kWh in the first quarter of 2018.
More rooftop solar installations that are part of the company’s Customer Owned Renewable Energy (CORE) programme and an increase in production of the 5 MW Entropy solar farm in Bodden Town meant that the share of renewable energy on CUC’s grid reached 2.8% of total energy.
The utility provider aims to have 25% of energy on the grid come from renewable sources by 2025.
The acceptance of CUC’s Integrated Resource Plan by the Cayman Islands Utility Regulation and Competition Office during the period bodes well for further integration of renewable energy, Hew said.
During the fourth quarter of 2018, the company submitted its 2019-2023 Capital Investment Plan for $273 million to the regulator for approval. CUC has also submitted an additional $77 million in proposed projects for battery storage and grid enhancement for review by OfReg.
These projects are expected to be financed directly by consumers outside of the company’s rate cap and adjustment mechanism.
After the adjustment for dividends on the preference shares, earnings on Class A ordinary shares for the quarter amounted to $4.4 million or $0.13 per share, compared to $2.6 million or $0.08 per share in the first quarter 2018.