Prices for some of Grand Cayman’s water customers will be cut under a new water supply licence issued to the company that serves some of Cayman’s top tourism and residential areas.
Cayman Water said the cost per US gallon of water sold in its licensed area, which includes the visitor and residential hotspots of Seven Mile Beach and West Bay, would fall by an average of 6.5% under the new 25-year deal with regulator OfReg.
Rick McTaggart, CEO of Consolidated Water, the George Town-based parent of Cayman Water, added that the company was confident it could continue to meet increases in demand from predicted higher temperatures and lower rainfall this year, as well as into the future.
“I can say that Cayman Water is well-prepared for any higher water demand resulting from potentially drier and hotter weather this year, or other weather events such as hurricanes,” McTaggart said.
He added the exclusive licence was “a significant milestone” for the company and its customers.
“Lower base water rates and energy cost recovery charges under this new licence will provide an approximately 6.5% reduction in the cost of water per gallon to our customers, compared with prior licence.”
The deal will also see continuation of a royalty payment of 7.5% of gross water revenues to Cayman’s government-owned Water Authority-Cayman.
The payment last year amounted to almost $1.77 million.
More reservoir capacity
McTaggart highlighted that a new two-million-US-gallon storage tank in West Bay would be completed this year and that production from the company’s desalination plants had been expanded to increase supply by one million US gallons per day at the end of 2025.
That is in addition to the five million US gallons per day pumped out from the Governors Harbour and West Bay reverse osmosis desalination plants and an 8.7- million-US-gallon storage capacity at the two sites and the Britannia site next to Camana Bay.
“We are able to increase our production and storage capacity as required to meet water demand, subject to approval of all major capital projects by OfReg,” McTaggart said.
The present $71.96 a month charge for domestic consumption of up to 3,000 US gallons a month will drop $6.88 to $65.08 a month – a reduction of about 9.6 %.
The reductions will mean a domestic customer who uses less than 3,000 US gallons a month will see a 14.5% drop in their bills.
A commercial user who consumes less than 3,000 US gallons a month will get a 12.6% cut in their water bills.
Commercial operators who use upwards of 3,000 US gallons a month will see a reduction of almost 7% on their water consumption over that limit.
It is anticipated that domestic consumers will pay an average of 9.6% less under the new arrangements.
McTaggart said Consolidated Water, which also has operations elsewhere in the Caribbean and the US, could operate more efficiently than other regional water suppliers because it had to justify operating expenses to shareholders.
“This keeps constant pressure on management to control costs in all aspects of the business and maintains focus on efficiency,” he said.
Energy efficient and low leak levels
McTaggart highlighted the low level of leaks from pipelines and reservoirs and meter malfunctions.
He said the company had lost 7.4% of production because of leaks in the year to date compared with losses in other regional water utilities of more than 20%.
McTaggart said Consolidated Water’s production plants were among the most efficient in the world in terms of power consumption.
He added that the new deal included a clause to ensure savings on power consumption were shared with consumers and that any power usage over an OfReg-set limit had to be absorbed by the company.
“So, if we further improve our energy efficiency through desalination industry innovation, the customer will see a reduction in their bills due to the shared savings mechanism in the new licence,” McTaggart said.
The news came just weeks after the government-owned Water Authority-Cayman announced that it would increase its rates by 3% from July.
The authority said the increase meant the base price for the first 12 cubic metres of water used in a month – about 2,640 imperial gallons or 3,200 US gallons – would go up 13 cents from $4.34 per cubic metre to $4.47.
The price for water consumption over 12 cubic metres went up from $5.57 to $5.74 a cubic metre – a 17-cent increase.
Sewerage rates, based on assessed Sewerage Fixture Units, will go up from $1.672 to $1.722 per unit.
The disposal charges levied on sewage trucks increased from $17.018 to $17.529 per 832.67 imperial gallons (1,000 US gallons).
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