The announcement of the signing of two new licence agreements between the Cayman Islands Government and Caribbean Utilities Company means Grand Cayman residents will not see electricity rates rise for at least one year.
Consumer rates for power have already been reduced by 15 per cent as of January 2008, including the removal of the hurricane recovery surcharge.
Those decreases came in an energy climate that has both government and energy producers urging conservation.
‘The end of cheap energy is here – we will likely see oil bottoming out at $70 a barrel, so we encourage consumers to conserve,’ said CUC President and CEO Richard Hew at a special press conference.
The new 20-year licence agreements, an exclusive Electricity Transmission and Distribution Licence and a non-exclusive Electricity Generation Licence for operations in Grand Cayman, replace CUC’s 1986 license agreement, due to expire in 2011.
Aside from eliminating CUC’s previously guaranteed 15 per cent rate of return, the licenses also open up the market for other suppliers, although the CUC will maintain control over the Island’s transmission and distribution infrastructure.
Minister of Works Arden McLean said he was pleased to conclude licence negotiations, which have taken more than two years.
‘Working with CUC, we have provided in these documents for a solid long-term framework for the further benefit of consumers, in which we will control rate increases; maintain reliability; introduce competition in generation; require performance standards; strongly encourage renewables; ensure proper regulatory oversight; enhance environmental protection; and encourage efficiency,’ he said.
‘This will all be done while also providing for CUC’s continued financial health.’
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