Growth in customers props up CUC earnings

| 05/11/2018 | 16 Comments
Cayman News Service

CUC’s new generator

(CNS): An increase in the number of customers for CUC helped to keep the monopoly power provider’s earnings up in its third quarter results for the year after slightly cooler and wetter average weather. An increase in fuel costs saw customers cutting back on consumption, which also impacted sales. The client base increased by 567 customers to a total of 29,584. Net earnings for the three months ending 30 September totalled $9.2 million, an increase of $1.5 million when compared to net earnings of $7.7 million for the same period last year.

In a press release outlining the results, CUC officials said that while sales for the year so far were negatively impacted by a 4% decrease in average residential consumption, the growth in customers resulted in higher revenue.

The average monthly temperature by the end of September was 82.5° Fahrenheit, compared to an average monthly temperature of 83° in 2017. The average rainfall was also higher at 4.08 inches compared to 3.62 inches last year. This wetter and cooler weather, as well as customer energy efficiency and increasing fuel prices, negatively impacted kilowatt hour sales. CUC said that the average cost per imperial gallon of fuel for the third quarter 2018 increased 27% to $3.13, compared to $2.46 for the third quarter 2017.

“The third quarter 2018 kilowatt hour sales were lower than expected but the company was able to manage costs and deliver an increase in earnings,” said CUC President and CEO Richard Hew, “We continue our investments in leading technology such as the new Seven Mile Beach substation, which will serve our customers more reliably and efficiently for many years to come. Rising world fuel prices and the negative impact on cost to serve our customers remain a concern and the company looks forward to a rapid diversification of the energy sources on the grid during the implementation phase of the Integrated Resource Plan.”

CUC broke ground during the last quarter for the new Seven Mile Beach substation. Expected to cost $16.7 million, it will be the company’s first substation to incorporate medium voltage, gas insulated switchgear technology and the first of its kind in this region. After this project, CUC will build a similar substation to serve the Prospect area, with groundbreaking anticipated in the fourth quarter of this year.

CUC said in the release that it is awaiting the regulator’s formal approval of the Integrated Resource Plan, which it developed with public and other stakeholder consultation. The plan calls for an increase in grid integrated renewable energy sources, which will deliver economic and environmental benefits.

“With world oil prices trending upwards again after an extended period of relatively low and stable prices, the attractiveness of diversified energy sources becomes more compelling,” CUC added.

Caribbean Utilities Company Ltd Q3-2018 Press Release

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Comments (16)

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  1. Anonymous says:

    Not just “growth in customers”!! Surely they’ve padded their rates in lieu of a published increase! I installed a water-heater timer three months ago and each of my electricity bills since have been, on average, $300 more than before the timer was installed!!

    • Anonymous says:

      You have another problem

    • Anonymous says:

      You need to get a check if your property. I live in a new 2 bed 1400 sq ft property & run my a.c 24/7 using a smart thermostat (to use a higher temperature when no one is home). I also use my clothes fryer & oven several times a week. In over 2 years I have never had a bill higher than $175. My most recent bill was $135

  2. Anonymous says:

    Always earning, because they are ripping their customers off. We have to pay or we don’t get electricity.

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  3. Anonymous says:

    the real news is that Cayman now has reached 100,00 people,

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  4. CB4 says:

    What a farce!! My August bill this year was almost 40% higher than August bill last year and the kwhs were almost identical. Fuel was 6% higher but where did the other almost 34% increase come from??? CUC is BS’ing us if they think they can pretend their higher profits were from increased customer base vs raping their existing customer base!!!

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  5. Anonymous says:

    they always earning … how is this news!!!!!!!!!!!!!!!!!!!!!

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  6. Say it like it is says:

    OffReg will not be able to review the Integrated Resource Plan until either: a. they have sent people on overseas courses to learn what an IRP is , or b. employed consultants to do it for them.

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  7. Anonymous says:

    Want to drop electricity prices? Have competition.

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    • Anonymous says:

      This won’t work simple due to the inefficiency of having double the amount of lightpole infrastructure requirement.

      Same reason why water utilities are given a monopoly on certain grids in the US. It would be a nightmare to troubleshoot system problems with three separate water utility’s pipelines running the same neighborhood.

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      • Anonymous says:

        Separate production – water, electricity, telephone – from distribution – power lines, water pipes, telephone lines – and you have your solution. You still have regulated monopolies (the distributes) but let competition handle the supply costs.

        Whether this will work in a place as small as the Cayman Islands is an open question. For telecoms it has worked (I have heard, I don’t have any pre-post deregulation prices per minute to back that up). For water it may work (we already have two producers on Grand Cayman, though not in direct competition.) For electricity we’ll see as OffReg put more energy production out to bid over the years.

        Bigger/smaller question is if it would work in the sister islands.

        More problematic question is if the energfy geenration goes out to bid but no one can underbid CUC. Or, like the solar farm, the new generator’s price doesn’t materially reduce the cost.

        We may find that for some of our utilities we are already at minimum profitable price given the level of investment we expect out of them. In this article alone CUC is reported to be investing two years net profit in a single substation. (And yes I know that using net profit vs cost is comparing apples to apple sauce but its what we have handy.)

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    • Anonymous says:

      You are aware that you can make your own (solar, gas/diesel/propane generator) and not use CUC’s.The choice is yours.

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