Caribbean Utilities Company (CUC) has increased its number of customers, sales and revenue in the second quarter, reflecting an ongoing economy recovery following the COVID-19 pandemic, the electricity provider said.
Second quarter net earnings of $8.3 million, however, were down $0.3 million compared to the same period a year ago, as a result of increased expenses, customer service costs and depreciation.
CUC grew its sales by 0.5 million kWh to 171.3 million kWh year on year, as the company’s customer base rose by 834 customers, or 3%, to 32,553 during the same 12-month period ending on 30 June.
For the first six months of 2022, net earnings are up 16% to $13.8 million over the same period last year. Electricity sales in the first half year saw a 2% increase in kWh consumption across all customer categories.
Fuel prices remain a challenge
Volatile fuel prices remain challenging for both the company and its customers as the average cost of fuel has increased by more than 50% in the past 12 months, CUC said.
The fuel cost charge billed to customers reached $0.20 per kWh compared to just $0.13 per kWh in the second quarter of 2021.
The utilities fuel factor revenues of $30.9 million during the second quarter were $9.5 million higher than a year ago.
CUC passes its fuel costs on to consumers on a two-month lag basis with no mark-up.
President and CEO, Richard Hew, said in a press release, “We are excited that the process to procure cleaner and lower priced renewable energy in large scale has begun as the significant increases in diesel fuel prices has been and will continue to affect our customers’ bills.
“The Company has been proactive in its messaging to encourage customers to take the necessary steps to conserve energy and is collaborating with the OfReg and the Cayman Islands Government to find ways to mitigate the cost impact in the short term, particularly during the high consumption summer months.”
The Cayman Islands government has launched a fuel relief programme for the hot summer months from July to September, when the power consumption by households is peaking.
The subsidy will be automatically reflected in customer bills in August and reduce to the billed fuel cost charge to $0.15 per kWh, for consumers that use between 100 kWh and 2,000 kWh per month.
Credit rating
In May 2022, Standard & Poors (S&P) revised CUC’s credit rating to stable from negative BBB+ on the basis of the company’s consistent financial performance.
Despite the pandemic, which negatively affected Cayman’s tourism industry, CUC’s financial measures have consistently remained above S&P’s downgrade threshold, the electricity provider said.
Renewable energy
CUC will participate in the upcoming solicitation for utility-scale renewable energy to be conducted by the regulator.
In April 2022, OfReg issued a request for qualification for the Renewable Energy Auction Scheme (REAS) Competition Round 1. The REAS Round 1 is intended to select a party, or parties, to operate and maintain Solar Photovoltaic Plants and Energy Storage up to 100MW with 60MW Battery Energy Storage System Facility.
OfReg also issued an RFQ for a solar plus storage 23MW Dispatchable Photovoltaic Generation plant facility.
CUC has received approval from OfReg for a 20 MW battery, which, the company said, will assist the diesel generators with grid stability during loss of generation and also reduce fuel consumption.
This project is under way but not anticipated to come online before late 2023.
Related Videos
