(CMR) Caribbean Utilities Company (CUC) customers should expect changes in their billing rates as both the Base Rate Adjustment deferral and the Fuel Cost deferral ended in December 2022.
The deferred rates commenced on January 1, 2023, with the fuel factor now less than CI$0.20 per kWh. According to CUC, the average residential customer who uses 1,000 kilowatt-hours of electricity per month will see an increase in their bill of approximately CI$5.31 per month via the facilities charge and energy charge line items. Fuel calculations are amended monthly to reflect current market rates.
Last year, CUC joined the Cayman Islands Government to provide relief to customers from October to December. According to the Cayman Islands Economics and Statistics Office, the roll-out of the Cayman Islands Government Relief program reduced inflation by 2% to 7.5% from 9.5% in Q3 2022. CUC anticipates further positive results related to the expanded support to all consumers provided by the parallel CUC Fuel Relief Program, which was in effect from October 1 to December 31, 2022.
In an email to customers, CUC said an increase is necessary as a utility company is highly infrastructure intensive, and the work to serve Grand Cayman requires a sizeable upfront investment.
“We have to invest in long-term physical assets to serve customers efficiently and reliably. Our capital expenditure typically exceeds our net earnings. Material costs have risen due to inflationary pressures worldwide.
Financial strength and stable regulations are required for the Company to access capital,” the letter stated.
CUC said it spent US$95 million in capital expenditure in 2022 to ensure its infrastructure was expanded and upgraded to meet the reliability and efficiency performance expected from our customers.
In preparation for the increase in more renewable energy to its grid, CUC also announced that it is installing two 10-megawatt (MW)/10-megawatt hour (MWh) energy storage systems at approximately US$20M. As a direct result of this project, CUC expects that the fuel savings to customers will be about CI$5M per annum.