OfReg seeks access to power provider’s books

| 07/10/2019 | 28 Comments
Cayman News Service
Caribbean Utilities Company

(CNS): OfReg has begun a public consultation on proposed new accounting rules for the electricity sector that the authority said will protect consumers by strengthening its capacity to detect abuses of market power and unfair pricing. While the public continues to demand that OfReg deal with the fuel providers, as that is seen as the primary reason for the office’s existence, there is still no news on what it plans to do regarding pump prices.

In a press release about this latest public consultation, OfReg said that it currently does not require electricity licensees to prepare separate accounts for each licensed business unit. But under the proposed rules, they would have to submit regulatory accounts alongside other reporting obligations.

The regulator said that regulatory accounts had “a proven track record and are a ubiquitous tool used globally by regulators to address concerns about potential abuses of dominant positions and market power, as well as pricing of products and services”.

OfReg claimed that this requirement would promote competition among electricity generators, achieve greater transparency around pricing and increase confidence in the competitive process.

Gregg Anderson, Executive Director for Energy and Utilities, said that separating the accounts would help with regulating retail tariffs and assessing the economic profitability and operational performance of licensees.

“The financial reporting instructions also require several disclosures for greater transparency regarding licensees’ operations. Providing separated accounts also helps the office to fulfill its core functions, including protection of the interests of consumers with regards to the affordability of electricity, promotion of economic and operational efficiency and sustainability in the generation, transmission, distribution and sale of electricity and promotion of competition, especially in the generation market.”

Members of the public, businesses in the electricity sector and any other interested parties can comment on the document in writing to OfReg by 5pm on Thursday 31 October. The relevant documents can be found on the website here.


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Category: Business, utilities

Comments (28)

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  1. Anonymous says:

    The new audit committee chair of OfReg was a senior member of the finance team at CUC. Stinks of conflict of interest.

  2. Anonymous says:

    OfReg should hold off on this until they have hired a team of forensic accountants, with many years of experience. Then once they have attended some more training, and many trade shows and seminars around the world, and once their new cars have arrived, they can hire some consultants go out with them to look at the books.

  3. Anonymous says:

    OfReg was on hand to allow a wholly-owned subsidiary of CUC to get into the fibre cable laying business, paid for by the electrical consumers of Grand Cayman. They also allowed CUC to collect a Gov’t fuel tax, which in reality had been waived, and then stood by to see this amount (or some portion of it) diverted to an NRA fund…but can anyone say if that’s where it went? When our Auditor General probes these questions, nothing seems to materialize…even with all the accountants on island.

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    • Anonymous says:

      Actually OfReg was not around when CUC setup its ICT Company, it was the ICTA and the ERA. From as far back as the year 2000 CUC owned fibre optic cables which were and are still used for remote control of equipment and data collection on the electricity system. CIG, ERA and ICTA thought that if CUC made some of the fibre available to ICT companies this would be beneficial to electricity and ICT customers. To make the fibre available under ICTA law CUC had to form an ICT Company licensed under the ICTA. Since that time the ICTA and ERA have come together under OfReg.

      With respect to Govt fuel taxes, CUC pays CI$0.25 per imperial gallon import duty included in the price it pays to the fuel companies for diesel. Only that price paid for fuel is passed through to electricity consumers. The fuel companies in turn pay the same duty of $0.25 per IG to CIG for all fuel imported and sold to CUC. What CIG does with the fuel duties collected is clearly not CUC or OfReg’s business.

  4. Anonymous says:

    If we’re talking about fuel, it’s not just pump prices, it’s establishing/adopting some kind of baseline quality standard for after-source additives, water content and impurities, and having the moral fortitude to establish ethical rules on provenance. Then, performing regular routine inspections and re-certifications to ensure compliance. Traditionally there’s only been regulation and testing for aviation gas at the airport. Diesel can come from anywhere, including internationally embargoed nations. Consumers are still being sold engine-knocking summer-grade gas at near-record pricing, unhinged from refined-gas pricing because too many gov’t cronies own/run the fuel stations.

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  5. Anonymous says:

    Finally, some action! This is what I wanted to see from OfReg: new accounting rules.

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  6. Anonymous says:

    Interesting. Part of the reason electricity bills are high is because fuel cost is high. Government charges import duties on that fuel. CUC is passing on that cost to the consumer. Government is part the reason the cost of electricity is high. The question is: how much profit is CUC making in Cayman and is that profit higher than other comparable places? If so, it could be unethical behaviour.

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    • Anonymous says:

      The Auditor General established (in AG Report 2018) that duties on fuel had been waived for some time, yet CUC continues to collect something that gets applied…nobody knows where. CUC do not report this pass-through collection anywhere in their TSE listing SEDAR filings. Has it gone to the NRA Fund? Where is that audit?

      • Anonymous says:

        CI$0.25 per imperial gallon import duty is included in the price that CUC pays the fuel companies for diesel. The fuel companies pay that same duty to CIG. What CIG does with the duty paid is CIG’s business not CUC’s to disclose in its filings. What CUC does disclose in their filings is that the cost of fuel(which includes the duty) is passed through to consumers without markup.

      • Anonymous says:

        Isn’t it for fuel price above some base price?

  7. Anonymous says:

    This is just play acting, CUC is OfReg’s master. OfReg is merely creating this ruse to justify their existence. Just like their empty promises of ensuring all telecom providers live up to their licence obligations, all false.

    Cut this anchor before it takes down our ship.

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  8. Anonymous says:

    Id like to see ofRegs books!

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  9. Anonymous says:

    It is time that CUC is looked into, the high cost of electricity, especially this year, is outrageous. The consumer has to pay the bill or they will have no electricity.

    I have lived at my residence for 27 years and the highest my bill got was around $400.00. From May this year it kept increasing each month – it went from $500.to $700.00.and only 2 people live in the house. We consumed the same amount electricity each month.The highest amount on the bill was the fuel and energy charge.I don’t know why the consumer is charged a fuel and also an energy charge?

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    • Anonymous says:

      Earlier this year a friend of mine living in the UK was hit with a 25% tariff increase by Eon and that was apparently approved by their regulators, Ofgem. Thankfully, he was able to shop around and beat it but power companies everywhere are just a bunch of greedy thieves.

    • Anonymous says:

      Guess it has nothing to with the outside temps!!! CUC will do an energy audit for you. Other companies will also do it for a fee. If you can save money following the results the fee will be worth it.

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    • Anonymous says:

      Sparky’s response:

      The “fuel charge” is the cost (without markup) of the fuel consumed by our generators in the production of the electricity that your household used for the month. The “energy charge” includes other costs such as maintenance materials and labour, interest costs, depreciation, etc. charged on a per kilowatt hour (kWh) basis. These charges differ from each other and relate to separate components of the electricity service we provide. The fuel factor is calculated on a monthly basis and the energy charge is subject to adjustment on an annual basis in June.

      In your specific example, if your May 2019 bill was $500.00, it means that you consumed 2,009 KWh in electricity during the period billed.

      In June there was a base Rate adjustment of 0.9% which resulted in a total monthly bill increase of approximately $1.06 for the average residential customer.

      If your September 2019 bill was $700.00 you would have consumed 2,680 kWh’s of electricity consumption in the month.

      The fuel factor charged in May was $0.1320 and the amount charged in September was $ 0.1424.

      It is customary for customer bills to increase during the summer months when it is hottest as air conditioners work harder to pump heat out of the buildings. According to the Cayman Islands Weather Service, the average temperature this past September was 86.60 degrees Fahrenheit when compared to 84.80 degrees Fahrenheit in 2018.

      For a better understanding of the billing items on your bill, please visit our “Understanding your Bill” section on our website https://www.cuc-cayman.com/customer-service/understanding-your-bill.

  10. Anonymous says:

    Just pay your bills people. Don’t waste energy. It isn’t rocket science! If its too much then leave the lights and A/C off!

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  11. Anonymous says:

    Why do they have such a hard on for CUC? They arent nearly as bad as the fuel companies and others.

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  12. Anonymous says:

    Shut OfReg down.

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  13. Anonymous says:

    they talk like there is multiple energy providers on island! what a joke, CUC has been raping us for years and its not going to stop anytime soon. But I will give them this they hire 90% Caymanians. I guess that’s why they feel entitled to our pockets and our politicians feel so obligated to ensuring their profits.

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    • Say it like it is says:

      5.38am Yes, what on earth is Mr Anderson talking about, saying that these new rules will promote competition between electricity generators, when we only have one. Providing all this additional information to Ofreg when they already produce audited accounts will only increase our electricity bills even more.
      As someone else commented we need to see Ofreg’s accounts to include a list of all their Executive Directors, their qualifications,and their salaries.

  14. Anonymous says:

    OfReg is leading the way in making sure Cayman consumers get treated fairly.

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  15. Anonymous says:

    CUC needs to itemize on it’s bills the costs of these new regulations

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    • Anonymous says:

      They do, and the $14.76 on my bill this month for OfReg costs is about $14.75 more than OfReg is worth.

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  16. Anonymous says:

    When will this stupidity end?

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