Caribbean Utilities Company customers will see an increase in the base rate of their electricity charges on their bills this month.
The planned price increase was deferred in June last year amid high inflation, to ease the financial challenges faced by consumers.
As announced and approved by utility regulator OfReg at the time, CUC was to apply the rate increase in 2023.
The average residential customer who uses 1,000 kilowatt-hours of electricity per month, will see an increase in their monthly bill of approximately $5.31 via the facilities charge and energy charge line items, CUC said in a newsletter to customers.
The power provider will also recover the cost of its Fuel Cost Relief Programme throughout this year via a separate $0.0075/kWh increase to the nominal monthly fuel cost rate.
The programme capped the fuel factor applied to household electric bills at $0.20 per kWh between October and December last year.
It came on top of a government fuel relief programme that paid for the fuel factor between $0.15 and $0.20 per kWh, limiting the cost applied to consumer bills to 15 cents per kWh.
Both the base rate deferral and the fuel cost support came to an end in December 2022.
Although the fuel cost incurred by CUC has come down from a peak of $0.236 per kWh in October to $0.188 per kWh, the cost of producing electricity remains higher than during the first half of 2022.
The electricity provider said the rate increase is necessary to pay for needed infrastructure investments. Such investments cover, for example, upgrades to the transmission and distribution system or engine maintenance, and are typically paid for upfront by the company.
CUC added that infrastructure spending is currently higher because of the globally rising cost of materials.
“CUC, like most businesses in Grand Cayman and across the world, is facing increasing costs of goods and services,” said Richard Hew, president and CEO of CUC, in a press release.
“The Company responded and was able to defer increases in its rates to customers over the past six months. However, a rate increase is now necessary for CUC to meet its obligations to serve the public safely and reliably.”
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