CUC responds to Viewpoint

| 23/05/2016 | 18 Comments

Cayman News ServiceCUC writes: We refer to the Viewpoint titled “The CORE Energy Issue”, which was carried on your news site on May 19, 2016. In this article the writer states: “As CORE output represented just a little over 1% of CUC’s general output from 2015, and any excess production would be a fraction of that, the effect on CUC’s bottom line and/or the cost passed through to other customers would be negligible. Under the new agreement, however, net credits are allowed to roll over until the end of the year, at which point they will be absorbed by CUC and applied to the fuel factor charged to all customers. This, in my opinion, is not in the public interest.

“CUC is a business and has every right and responsibility to enact policies to maximise revenues and protect shareholder interests. However, by approving this change, the ERA and, by extension, the government of the day has essentially determined that lowering the average price of electricity by a miniscule amount matters much more than enacting policies to encourage further growth of renewable energy sources, reducing the nation’s carbon footprint and promoting longer-term price stability and price reduction.”

The above statement is incorrect and needs to be corrected. The CORE program is designed to pay CORE producers at a credit rate that is subsidized by all electricity consumers. Under the recent changes, any credits remaining at the end of the year will be returned to all consumers, not to CUC and therefore does not reflect any additional revenues or profits to CUC.

The main purpose of the end of year “zeroing” of CORE credits is 1:to discourage customers from oversizing units above their average annual consumption which represents higher costs to all consumers; and 2:to share renewable energy capacity amongst all customers based on average annual consumption.

If renewable energy installations are appropriately sized to match their annual consumption, then this change is not an issue for the typical CORE producer.

The CORE programme which was revised and approved by the Electricity Regulatory Authority (ERA) in 2012 has been very popular with both residential and commercial customers. At the end of last year the programme had connected 134 participants with over 1.8 megawatts (MW) of renewable energy capacity tied to the grid. The programme allows customers to connect small scale solar systems or wind turbines to CUC’s distribution system and to reduce their monthly energy bills by generating their own electricity while remaining connected to the CUC grid.

CUC strongly supports and will continue to encourage the growth of renewable energy sources as evidenced by the additional 2MW of CORE capacity which was recently announced, and the 5 MW solar plant currently under construction in Bodden Town which does not require a subsidy.

CUC is also actively supporting an anticipated 2016 ERA’s Request for Proposals (RFP) for an additional 6 MW of renewable energy and has proactively set a Company target of 25% of energy coming from renewable sources to be connected to the grid by 2025. However, the company is also mindful that it has to consider costs to consumers and reliability of the grid in growing the renewable energy penetration.

There are many benefits to the CORE program and we encourage customers to contact CUC to get additional information about the program.

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Category: Local News, Viewpoint

Comments (18)

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  1. Anonymous says:

    Some good posts here. Lets be clear about this. CUC don’t want to encourage renewable energy because it will affect their bottom line. The country could go 100 percent renewable now using current battery technology, giving us cheaper electricity, saving hundreds of millions of dollars on imported diesel and giving us a clean environment. Its time for the government to put the interests of the people before CUC shareholders.

    .

  2. Sharkey says:

    CUC it really hurts when someone steps on that bottom line . But what about ones at the TOP LINE / consumers no respect..

  3. Anonymous says:

    I have installed solar. It is not core connected and did not cost me much.
    I have a few batteries, some panels, a charge controller and a transfer switch.
    If a hurricane or power outage occurs, I have a cool fridge, lights and fans. Less than 3k can do this. Call your local solar folk, any one. CUC have not yet figured out that sunlight is a free gift from The Creator.

  4. Anonymous says:

    I wish they would make up their minds, either it’s a fraction of 1% and insignificant, or it will result in higher costs to all users. I don’t have solar, but I think I would be a bit miffed if they divided up the few dollars extra I had made from buying, installing, maintaining and financing solar panels, and gave it back to everyone who hasn’t bought, intstalled etc. After all, the CUC contract allows them to make a guaranteed return off everyone on the island and no give-backs if they make more!

  5. Anonymous says:

    Thank you for the response. The hard work of CUC to provide such a wonderful first world service which is the envy of the region rarely gets the credit it deserves.

  6. Anonymous says:

    In the end, until I can pull a switch and go off grid or be able to should another Ivan come our way.

    This is pointless, the savings needs to be greater than the loan costs to get the equipment in the first place. The point of buying larger systems is to enable a credit back and also to create more energy for the whole country. The future is in everyone doing this. Being self sustaining.

  7. Anonymous says:

    Tesla batteries, it you have solar power – get one.

    • Anonymous says:

      Get 2 or 3 for a backup system. Hell, you can buy the larger models and power your neighborhood. CUC should start reeducating for their maintenance before several business offer that service, or refocus to consumers of industrial use of electricity, they have lost the game on residential, but don’t let them know that, it will be more fun to watch them skirm like worms with all the new competition.

  8. Anonymous says:

    “CUC is a business and has every right and responsibility to enact policies to maximise revenues and protect shareholder interests.”

    This sentiment is exactly the problem with our implementation of capitalism to which I completely disagree. This sentiment of many corporations represents a clear and present danger to the well-being of our civilized world. These companies have been allowed to implement harmful consumer policies for so long that they they now seem to think that they have a divine right to do so and that they can victimize consumers at will.

    CUC rights for shareholder interest can never be above the well-being of our nation. If CUC or any our company is harming the general well-being of our nation then we need to use our government to protect the people’s interest. If that means that they close their doors, then we thank them and hold the door open for their exit. We will recover from any sort term pain.

    CUC seems to misunderstand a basic democratic principle in that the people has only authorized one monopoly in our nation and that is called “The Government”. Any other entity that operates as a monopoly has no right to a consumer policy. But the Government has the right and responsibility to regulate them in the best interest of our nation. If they cannot operate in such an environment they need to plan their exit. We need to put a stop to this runaway corporate greed that threatens to impoverish large portions of nation. Our Governments needs to fulfill it’s responsibility to its’ people and better regulate companies that are hurting our nation.

    With the exception of corporate greed, I do not understand the reason why the CORE program is allowed to exist when the counties that actually make this equipment uses “net metering”. If CUC does not want to pay for the consumer produced electricity then we can simply implement “excess metering”, so that we can use what we produce and get any additional from CUC. If we produce more than we need at any point then we can just give it away to CUC for free (or throw it away to ground).

    As a monopoly, CUC has no right to a consumer policy; that responsibility should belong to the CPA. The government that allowed the CUC CORE policy made a mistake in understanding it’s responsibility to its people and our planet, so fix it.

  9. philip nadeau says:

    The fact that the consumer will not receive the credit will not encourage them to be more efficient in their energy use. If for instance they receive an average of $100 per month credit (which is what I currently receive under the original CORE agreement) it will not make any difference to them by leaving lights on, not switching to LED or leaving windows open in the summer if they won’t actually be receiving that as a cash refund.

  10. Anonymous says:

    Please note in the CORE agreement, section 2.4: “At the end of each calendar year any remaining CORE credit balance on the customer’s account will be refunded to the Fuel Factor and not refunded to the customer.”

    Why the Fuel Factor? Why not the “Energy Charge?”

    • Anonymous says:

      If the refund went to the energy charge it would go to CUC’s credit. The fuel charge is where all the fuel and renewable energy purchase costs are passed through directly to consumers and credits would also be passed through directly to consumers.

  11. Anonymous says:

    a business or a monopoly?

  12. JTB says:

    While CUC can’t seem to go from one week to the next without a power cut, notwithstanding their exorbitant prices, this discussion seems rather irrelevant.

    The sooner this shameless, inefficient, incompetent, mercenary business loses its stranglehold on Cayman the better.

  13. Anonymous says:

    you say that any credit at the end of the year will be “returned to all consumers” rather than to the individual CORE customer. I will probably have around $400 in credit at the end of the year. How many consumers are you “returning” the $400 to? 15,000?, 20,000? I bet they can’t wait to get their share of that!

    • Anonymous says:

      It is not as trivial as you make it out to be if you acknowledge that the non CORE customers are paying you and the other producers a subsidy that is approaching millions of dollars a year. The changes in the CORE programme is designed to spread that subsidy to more participants and hopefully some of the smaller consumers.

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