The impact of the COVID-19 pandemic has been reflected in Caribbean Utilities Company’s financial results for the first nine months of 2020, with net earnings of $18.7 million representing a decrease of $4.2 million compared to the same period last year.
In the third quarter, net earnings totalled $10.4 million, the same amount as in the third quarter last year, mainly as a result of higher depreciation and finance charges, CUC reported.
Third-quarter electricity sales of 175.1 million kilowatt hours (kWh) decreased by 9.3 million kWh, or 5%, year-on-year.
Sales for the first nine months were 11 million kWh, or 2%, lower at 492.9 million kWh, as large commercial customers reduced their consumption in the wake of coronavirus lockdown measures and border closures. This was partially offset by an increase in the electricity consumption of residential customers compared to last year.
CUC president and CEO Richard Hew said in a press release, “Although the duration and final impact of the COVID-19 pandemic on the Cayman Islands’ economy and CUC remain uncertain, Q3 2020 represented a relatively stable quarter for the Company in the circumstances.”
The average fuel costs during the nine months declined by 24%, resulting in lower electricity prices for consumers.
The company announced in August that it would push back a 6.6% price increase until next year. CUC would have been allowed to increase its base rate from 1 June under the Rate Cap Adjustment Mechanism that is part of the electricity provider’s licence.
Hew said the company was pleased to reach agreement with utility regulator OfReg to defer the impact of the rate adjustments on customer bills until 2021.
The higher price will now take effect in January and be billed in February.
Hew noted that during the third quarter, CUC also submitted a utility-scale solar-project proposal to the regulator. The electricity provider has been pushing for large-scale solar farms in Cayman to meet the National Energy Policy’s goal of achieving 62% of all energy generated from solar by 2037.
At a Public Accounts Committee hearing in July, Hew said the price of new utility-scale solar technology had come down sufficiently to replace much of the currently cheaper diesel-generated energy in Cayman.