Higher than average temperatures in the third quarter of 2019 and a corresponding increase in air conditioning usage have pushed Caribbean Utilities Company’s sales by 8%, to 184.4 million kilowatt hours, compared to the same period last year.
The average monthly temperature for the quarter of 86.5 degrees Fahrenheit was 1.1 degrees higher than in the third quarter of 2018, CUC noted in its latest earnings report.
President and CEO Richard Hew said the period continued a trend of positive quarterly financial results for the company, which was continuously reinvesting in modern equipment in response to the record level of electricity demanded by CUC customers.
CUC experienced a new system peak demand of 113.5 megawatts on 28 Aug. In 2017, peak demand was 105.6 MW after 103.6 MW in 2018.
The company’s installed generating capacity is 161 MW. Renewable capacity connected to the grid increased to 10.3 MW in September 2019 from 9.7 MW in September 2018.
The company has invested $43.7 million in physical infrastructure so far this year to meet present and future demand. CUC anticipates investments of more than $270 million towards system extension and upgrades during the next five years, in line with its recently approved 2019-2023 Capital Investment Plan.
Hew said major projects such as the new Seven Mile Beach and Prospect substations and the control room and control system were progressing as planned.
In addition, CUC is planning to commence the recently approved battery storage project which will connect more renewable energy to the grid.
“The company expects that the initial savings to the customers from the battery storage project will be approximately $1 million per annum,” the chief executive said.
CUC’s $9.7 million operating income in the third quarter was $0.3 million higher than the same period in 2018. The company also saw a 2% increase in the number of customers to 30,254 compared to the third quarter 12 months ago. The growth in electricity sales revenues was partially offset by higher depreciation and maintenance expenses.
Quarterly net earnings of $10.4 million were up $1.2 million year on year with lower finance charges and higher other income contributing to the growth. However, interest on long-term debt increased and foreign exchange gains declined.
A one-off write-back of previously recognised bad debt expenses of $1.1 million by subsidiary company DataLink positively impacted the company’s other income. CUC had reserved the bad debt after regulator OfReg determined in 2017 that the way DataLink charged reservation fees to telecommunication companies for attaching communication cables to CUC’s electricity poles was contrary to the Information and Communication Technology Authority Law.
OfReg ordered DataLink to negotiate a refund of the fees charged, but the company was granted a stay of the decision and filed for a judicial review. On 25 July 2019, the Grand Court decided in CUC’s favour and quashed the determination by the regulator.