A drop in Caribbean Utilities Company fuel factor will mean cost savings to Cayman Islands customers starting next month.
The fuel factor, which is a CUC expense item that is passed directly on to consumers, reached an all-time high of 11.19 cents per Kilowatt-hour in January, after being 10.72 cents per KW in December.
However, for February, the fuel factor has dropped to 9.18 cents per KW, and in March it will decrease further to 8.63 cents per KW.
In accordance to its licence agreement, CUC applies fuel factor rates to customers’ bill two months after the fuel is paid for, so the rates for March are based on fuel costs in January.
Although the fuels costs look to have peaked and are heading downwards, CUC’s president and CEO Richard Hew cautioned against assuming they will stay lower.
‘No one knows,’ he said about future fuel costs. ‘I can tell you, though, that it’s not a supply problem. Oil inventories are very good.’
When fuel costs started rising last June, CUC originally thought the increase would only last through August. Instead, they kept on rising.
Mr. Hew thinks fear of escalating problems in Iran and of terrorism are part of the reason fuel cost have remained high despite high inventories.
Contrary to what some people think, CUC does not make any profits on the fuel charge.
‘People think we benefit, but we don’t,’ said Mr. Hew. ‘If anything, it hurts us in our sales. When electricity prices go up, people start to conserve more and our sales go down.’
Mr. Hew pointed out that fuel adjustments for electricity are not something unique to the Cayman Islands.
Rising fuel costs have caused dramatic increases in electricity bills elsewhere as well.
An article in the Miami Herald last week noted that South Florida customers are seeing increases of up to 40 per cent in their electricity bill compared to a year ago, mainly because of a fuel charge added by Florida Power & Light.
Related Videos
