CUC cleared to hike rates by 1.6%

| 09/06/2017 | 58 Comments

(CNS): Both business and residential customers on Grand Cayman will see a hike in their electricity bills from this month after the regulator, OfReg, cleared CUC, Grand Cayman’s monopoly power provider, to increase rates by 1.6%. Officials at the power company said the increase in the base rate is in line with the Rate Cap Adjustment Mechanism in its licence. But just as the weather starts to heat up, the average residential consumer can expect their monthly bill to go up by around $1.83, the firm said in a release Friday.

The increase is based on a formula that determines inflation via the local and USA price indexes. After CUC’s financial reports were audited and the Cayman Islands and US CPI reports, as well as CUC’s agreed 7.4% return for 2016, were assessed, OfReg approved the hike. CUC said that the increase does not impact the fuel cost charge or the licence and regulatory fees charge.

President and CEO of CUC, Richard Hew, said the efficiency of CUC enabled it to keep base rate increases below the level of general inflation.

“The company invested US$46.5 million in 2016 on modern, efficient and reliable equipment, which enabled CUC to post its highest ever fuel efficiency and, combined with lower world fuel prices, we were able to pass on the savings of US$25.6 million to consumers in 2016 when compared to 2015,” he added.

Louis Boucher, Acting Executive Director of Energy and Utilities at OfReg, said the increase in rates would not significantly impact most consumers’ bills and they should continue to see the positive impact that lower fuel costs and government duty cuts have had.

These lower fuel rates would persist through the hot summer months, Boucher stated, despite the increased electricity consumption to come. He said the RCAM was intended to push CUC to constantly improve its efficiency, and OfReg was pleased to see that it had managed to maintain its return on rate base “whilst continuing to ensure that the island has robust generation, transmission and distribution resources deployed”.

See details of the rate increase and how it’s calculated in the CNS Library

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Category: Local News, Utilities

Comments (58)

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  1. Anonymous says:

    At least we are spared the grotesque spectacle of a “feel good” newspaper photo from a few years back!

  2. Anonymous says:

    First off, CUC is a publicly traded company, meaning it is owned by the shareholders on record. It trades on a Canadian Stock Exchange. The largest shareholder is a company called Fortis Energy Bermuda, which owns 59.46% of the company.

    Government cannot do anything about the rate hikes, it is part of a contractual agreement between CIG and CUC that promises a certain percentage of revenue each year, hence the rate hikes. What CIG can do is lower the fuel duty surcharge we all see on our bill monthly.

    As a publicly traded company, CUC has many shareholders, foreigners and locals alike. Most locals will say that they do not own CUC shares, which they are misinformed about. If you are participating in a local pension fund, then more than likely you indirectly own CUC shares.

    CIG pensions probably has one of the largest allocations to CUC. Now, is it making sense as to why it is in CIG’s best interest to keep CUC profitable? A lot of people will be affected in regards to retirement if this company is not profitable.

    My suggestion is to go find information on how to become a shareholder (which pays almost 5% in dividends). You cannot beat them and by the time competition comes to our islands, CUC would probably be owned by the competition causing an illusion of a free market but in reality it will still be a monopoly.

  3. Anonymous says:

    the political party being supported by big business gotta pay them back somehow? and you know which paty i am talking about cayman!!!!??

  4. Anonymous says:

    I am not a shareholder in CUC, but I have done everything that I can to conserve electricity and my monthly bill is reasonable. Shouldn’t water and propane be free as well? and gasoline no more than $1 per gallon?

    It seems to me that a lot of the people complaining here about CUC would like us to use the Jamaica model where one million people (out of a population of 3 million?) don’t pay for electricity or water. Do you want your politicians to represent you as they do in Jamaica?

    KINGSTON, Jamaica — A number of OBSERVER ONLINE readers are blaming politicians for the high rate of electricity theft in Jamaica due to their inaction in communities they are elected to serve. The readers were responding to a Jamaica Observer report on Sunday that about one million Jamaicans are stealing electricity.Chief Executive Officer (CEO) of the Jamaica Public Service Company Limited, Kelly Tomblin, who will be leaving the position next month, said that it is really hard to deal with the amount of electricity theft in Jamaica.
    http://www.jamaicaobserver.com/latestnews/Readers_blame_politicians_for_high_electricity_theft

  5. Sharkey says:

    I missed to say that the voters needs to replace every Politicians next Election if they don’t correct this monopoly by CUC.

  6. Sharkey says:

    I think that the time has come very shortly after this Election that these Cayman islands politician’s needs to learn that their job is also to protect the voters against this kind rate increases by CUC.

    I can’t imagine what everyone is paying for electricity in Cayman islands today.
    I think that everyone on the Islands should protest to CUC that we aren’t going to pay no more high prices for electricity. Then Government has to step in and do what they aren’t doing now.

  7. Anonymous says:

    Hold on… Lower fuel prices.. just got a huge solar farm… yet still hiking prices on the poor people of this country? This is ridiulous.

    • Fred the Piemaker says:

      First, the price of fuel is reflected in the rate separately from the guaranteed return on investment, which is what this is about. In other words the price has come down because of fuel cost – there is however an increase because of the cost of investing in new equipment. Second, you think solar should be cheaper because sunshine is free, but you are not allowing for the significant cost in installing solar infrastructure. World wide solar is one of the more expensive (and unreliable) ways of generating electricity. The real problem here is the cost of generating and distributing electricity on a small island using diesel and solar. No large population to spread the investment and transmission costs across. Sure we have one of the highest Kwh rates worldwide, but its also one of the most expensive places to operate an electricity business.

    • Anonymous says:

      yes sir, every summer they do this, check out the headlines from last summers…

  8. Anonymous says:

    and for all you who voted for Mckeeva and Alden, why not ask your two foolish leaders to do something? or theres nothing they can do right? lol. always want these 2 fools in power who CANNOT do nothing for Cayman, THEY JUST KEEP Letting the RICH OUT SCREW CAYMANIANS … WHY? for the damn monopoly … CUC is the only provider of power, so why the need to increase AGAIN!!!!!!!!

    THANK YOU MCKEEVA BUSH AND ALDEN for have your “Caymanians” Back …

    B**s**t Artist …

    Anonymousir ….

  9. Anonymous says:

    How can the average residential consumer be paying only $115? Throwing out a figure of $1.83 surely cannot be correct and is stated in order to make people think that it will not be much more added to there bill. If your bill is $300 you will be paying an additional $4.80…

  10. Anonymous says:

    This is what you get when a company– any company– has a monopoly in the sector.

  11. Anonymous says:

    I still believe that CUC just puts whatever price they want on Customers bills. I don’t see anyone checking meters anymore.

    My bill has been increasing from April and I haven’t been using anymore electricity. I also don’t put on my Ac at night in order to try to save electricity.

    They need competition just like any other business!!!

  12. Kadafe says:

    Pirates week is not until Oct! CUC pirates at it again and just in time for the summer. Surely he was misquoted, more likely to be going up $1.83 every 12 hours! Here comes another boost in supermarket prices that will never come down again despite any reduction in future oil/fuel prices, they are famous for that! tomorrow the prices will be up again on the shelves never to come down again! And another thing while I’m at it, has anyone else noticed the gasoline prices slowly but quietly climbing up again? Hard to relate to the troubles of the common man with the huge MLA salary they make though, disconnected from real life of the citizens or just don’t care while their buddies in the big companies pirate every possible dollar from the common man. Amen.

  13. Anonymous says:

    Increasing the dividend next quarter?

  14. Cayguy says:

    What’s funny because i actively monitor my ac usage, my bills stay in 200 to 300 dollar range for just over 2000 sq feet. some people complain that have almost 4000 sq feet spend closer to 1000 on electricity…more sq ft takes more electricity to cool those size properties. you have to monitor your usage, especially of ac as it burns the most kilowatts people. same wth electric dryers and stoves. You don’t need a rocket science degree to figure it out. an ac guy once told me the most efficient ac is the one without a on and off button!

  15. McCarron McLaughlin says:

    I still can’t wrap my brain around the folliwing:

    1) New smart meter in 2015
    2) lower fuel prices
    3) new high efficiency electric generator
    4) No change in my consuming habits

    But my electric bill continue to rise, I’m I missing something? There is no REAL consumer protection and until we have it, CUC will continue to “break it off” as we say here in Cayman. Lastly, please forgive my asking, can anyone confirm which ministry has oversight responsibility over OfReg, their website says they are independent, but I would want to know who has ultimate responsibility the this new formed OfReg is acting in the best interest of the consumers????

  16. Anonymous says:

    politicians own shares in cuc…they giving themselves a raise mon!?

  17. Anonymous says:

    If you are smart you can manage how much power you use on a daily, weekly and monthly basis. Don’t sleep with your a/c on and complain when your bill is high. It is going to be high because of the a/c.

    The bills are going up by $1.83 cents. Control what you use people and stop the constant complaining about every blessed thing!

    • Anonymous says:

      Salaries frozen, prices of everything going through the roof. I will bitch as much as I want to.

    • Ann says:

      You must be a big CUC shareholder. Why install A/C if you can’t enjoy it. CUC always seem to increase the rates during the hottest time of the year.

      • Anonymous says:

        CUC does not SEEM to increase their rates during summer months. They DO increase rates during summer months! They NEVER decrease the rates, in spite of making millions of profits every single year! Is there no clause in their agreement with Government to allow a decrease some years instead of always, always increases, even when their lower operational costs would allow that??

    • Anonymous says:

      Don’t sleep with a/c? 40000 people would leave rather than sleep in a pool of sweat every nght.

    • Anonymous says:

      And if you were smart 5:37 you would be able to tell me how with diesel prices dropping so much this year CUC can justify increasing prices? Diesel fuel powers the generators 5:37. Suspect you enjoy being ripped off or you have a substantial number shares in CUC and are laughing to the bank.

  18. Anonymous says:

    I wish my company was guaranteed 10 million profit a quarter like CUC and their government mandated monopoly.

  19. Anonymous says:

    OfReg is a joke.I don’t care what the formula is, why should CUC up their rates when profits are climbing each year. Do Govt and their acolytes enjoy a special discount?.

  20. Anonymous says:

    Solar and Batteries soon come, so expect some new legislation and regulations on battery systems to keeo CUC in business.

  21. Anonymous says:

    Thanks Unity Government – Thanks a lot!

    Thats strike 1 for Jon Jon and Austin, never really expected any better from those two puppets Bernie and Eugene

    • Ann says:

      Excuse me, this was done before the Unity government was formed. It will take effect in June. Remember the government was sworn in June 1st?

  22. rob says:

    then why did my CUC bill go up almost 100% last month …

  23. Anonymous says:

    Let’s see how our new elected crew deal with this?

    • Kmanman says:

      That must reflect your usage. Mine when up as the daily temperatures increased but nowhere near 100%.

  24. Anonymous says:

    Let’s get philosophical here.
    Does your light come from light or darkness?
    Diesel is dug from the darkness of the earth and solar comes from light.
    People of the Cayman Islands, let us abandon this madness.
    Those who can go off grid now, go for it. The poorer folk will follow later.

    • Anonymous says:

      Please don’t confuse dime-store philosophy/religious myths with analytical thinking philosophies. You won’t find the latter in any church because people who consume the greats like Schopenhauer, Hegel, Spinoza, Plato, Descartes, can see miles away a time-wasting money-sucking religious philosophical fool and will do whatever it takes to avoid that manipulating trash at work or play.

      Anyway, go solar, for the obvious reason it empowers the people from monopolistic abuse.

    • Anonymous says:

      Going off grid will hike up prices more for those who can’t afford to do so. If there was a simple solution it would have been thought of. Renewable energy is more costly at this moment, and someone has to pay for it now that government has mandated it.

  25. Anonymous says:

    I hope they have tsunami insurance?

  26. Anonymous says:

    Solar power coming so price goes up. Cayman logic. Cayman monopoly.

  27. Anonymous says:

    Oh boy.
    What do you expect from a private company that has a government contract which guarantees they will make an annual profit?
    Shame that this company which was started by the people and government was privatised years ago, but then again who were the original benefactors of such a sly move?
    Hmm

  28. Anonymous says:

    Yeahh! Just as I got a 1.5% salary raise (in my dreams, anyways).
    I can only say SHAME!!!

  29. Anonymous says:

    hike away….i have a 1 bedroom bath y kitchen? nevrr had a bill above $100 per mt, even with ac….and yes, i am a born caymanian….

  30. Anonymous says:

    Just in time for the hot summer months when we are forced to use more electricity…This is criminal!

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