Caribbean Utilities Company is battling in court to prevent the release of two studies that give information about its costs and the capacity of Grand Cayman’s power grid to add renewable energy.
The ombudsman’s office early last year ordered that OfReg, the utilities regulator, release the documents following a protracted freedom of information dispute.
OfReg had agreed to release a small portion of a 2014 ‘CUC Cost of Service Study’, which the power company had supplied to the regulator to justify a proposed increase in base electricity rates, but had refused to provide the second report, the ‘Incremental Distributed Solar Study (2023)’. The regulator had cited commercial interests in an upcoming request for proposals bidding process for the generation of renewable energy as the reason why the studies should not be disclosed.
In its decision on the matter last year, the ombudsman had found that OfReg had failed to adequately demonstrate the connection between the records and the bidding process, or the potential harm to CUC’s commercial interests if the studies were released.
On Wednesday, the first day of a scheduled three-day judicial review before Grand Court Judge Jalil Asif, lawyer Chris Buttler, KC, representing CUC, argued that the power company had been unfairly omitted from the formal freedom of information appeal process between the ombudsman and OfReg.
As a result, he argued, CUC had not been given an opportunity to correct submissions by OfReg that failed to explain properly why the documents should be exempt from disclosure.
Buttler noted that the electricity company had been aware of informal alternative dispute resolution hearings about the release of the studies, but when those failed to resolve the matter and the proceedings moved to a more formal footing, neither OfReg nor the ombudsman had informed CUC.
In her hearing decision, issued on 5 Feb. last year, Ombudsman Sharon Roulstone had raised concerns about CUC “co-designing the specifications of the request for proposal for an upcoming bidding process, in which they, themselves, will be an interested party”, stating that this had the “appearance of a conflict of interest”.
Buttler told Asif on Wednesday, “We say in our case that the ombudsman’s erroneous findings that CUC was co-designing the RFP specifications was linked to the fact that she never put her questions about the RFP process to CUC”.
Instead, he said, those questions had been put to OfReg, which did not adequately answer them, and CUC was never given a chance to address them.
He said when OfReg had been informed by the ombudsman that it had not made an adequate argument as to why the CUC studies should be exempt from disclosure, the regulator had resubmitted a memorandum that it had already submitted.
Following this, “again, CUC wasn’t told about OfReg’s totally inadequate response to concerns brought by the ombudsman and therefore wasn’t given any opportunity to remedy OfReg’s submissions,” Buttler said.
The initial freedom of information request that has sparked this judicial review was filed by James Whittaker, president of the Cayman Renewable Energy Association, through the FOI Act in April 2023.
The hearing continues.
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CUC is a pure monopoly. There is zero competition and that is likely why they don’t want to release their numbers.
Imagine being able to buy gasoline from one company only, coffee from one supplier ect. The price would likely be overcharged but someone is making a lot of money.
This should all be public domain and released as part of the rate setting process. If you argue that CUC is a natural monopoly, they should be able to earn a fair return, not gouge customers.
Looking ahead Cayman would likely be better served if CUC was allowed to maintain a monopoly on distribution but not generation. It would be a waste of resources to re-create the network, but new and replacement generation capacity should be open to competition.
What are they trying to hide?
The system whereby CUC buy power back from rooftop solar system is flawed.
They currently enter into a contract to buy the electricity at a fixed price for the term of the contract.
Instead it should be a percentage of their regular price per kWh; then they can make a profit on the power they buy back from homeowners. If power prices go up the homeowners get more, and vice versa.