Caribbean Utilities Company CEO Peter Thomson said Thursday that the electric company was willing to share with consumers the costs of recovering US$12.7 million of losses and costs caused by Hurricane Ivan.
Speaking at a press conference to announce CUC’s 2005 un-audited financial results, Mr. Thomson said that, according to the company’s current licence agreement, it was entitled to a 9 per cent rate increase effective 1 August.
However, Mr. Thomson said CUC was working with government to look at alternative ways the company can recover losses and reduce the financial impact on its customers.
‘We recognize that the last thing we want to do is have a substantial rate shock to our customers,’ he said.
Nevertheless, some sort of rate hike will occur.
Mr. Thomson, who said he is one of the 1,700 CUC customers who have not yet had electric service reconnected at his home because of Hurricane Ivan damage, empathises with consumers.
‘We’re all consumers, and we recognise the pain,’ he said. ‘We’re all human, but we have a business to run, and we have shareholders to report to. We have to recover costs.’
Customers will not have to bear all of the costs however, as CUC and its shareholders will also take a hit.
‘CUC will be absorbing some of the costs,’ Mr. Thomson said. ‘We are prepared to share the pain.’
Mr. Thomson said CUC first wrote to the government in February indicating they needed to think outside the box in terms of ways of covering the box.
On Wednesday, CUC executives met with Leader of Government Business Kurt Tibbetts and Financial Secretary Ken Jefferson to present 2005 the un-audited financial results and once again indicated its willingness to come up with alternative methods of recovering Hurricane Ivan losses.
Mr. Thomson did not specify the suggestions CUC has made to the government, but alluded to ways the problem has been resolved in other jurisdictions.
In the Florida panhandle, the Gulf Power Company was given government permission to levy a two-year surcharge that amounted to $2.71 for an average 1,000-kilowatt-hour bill to collect $53.2 million of its Hurricane Ivan loss.
Gulf Power absorbed the $44.8 it laid out for various capital and operating costs relating to the hurricane.
In exchange for the deal, Gulf Power agreed not to raise electricity rates for two years.
Mr. Thompson said he anticipated that any deal reached with government would likely involve the recovery of costs to be spread out over two or three years.
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