Public ‘freaks’ over CUC bills
(CNS): Grand Cayman’s power provider, Caribbean Utilities Company, was at the centre of a social media storm this week as power bills began arriving in people’s inboxes. The public freaked out over higher than expected charges, accusing the power providers of gouging. CUC has not answered direct inquiries on this yet but it appears there are no rate rises. However, with people working from home due to the COVID-19 curfews and warmer weather, their power consumption has increased.
CNS and other media houses sent questions to CUC, who acknowledged receipt of those questions. But on Thursday the firm issued a public circular warning customers that their energy use was likely to have increased given the circumstances and things were likely to get worse.
While many people were claiming their usage had not increased, there is no apparent hike in any of the elements that make up the bills. People also complained bitterly about the fuel rate, which was as high as the previous months despite the rock bottom oil prices. But that is because CUC buys its diesel long before it arrives and so the fuel factor is subject to the same lag in price reduction as local gas stations, recently sanctioned by the utilities regulator, OfReg
During Friday’s COVID-19 press conference, Premier Alden McLaughlin said he was aware of the “firestorm” when people got these high electricity bills even though the bottom has fallen out of the oil market. The premier pointed out that everyone is home and the weather is getting warmer. But he said the fuel surcharge, which is a separate item on the bill and which CUC is not allowed to mark up, was based on what CUC paid when they bought the diesel two months ago.
“But based on the information I have, by the June and July bills people will see a significant reduction on the fuel charge,” he said but warned that the bills will probably not be any less because everyone will be using more power.
According to the flyer sent out by CUC, families can indeed expect things to get worse as the people continue to work remotely and temperatures rise. Offering tips on tracking consumption and how to cut down energy use, CUC warned their customers that air-conditioning is estimated to be 70% of the energy they are consuming at home.
Meanwhile, in its its first quarter financial results for 2020 published this week, the company said it had not yet seen an impact on its financial situation from the COVID-19 pandemic related measures. But the company said it was bracing itself for the health crisis to hit its bottom line in the results for the next quarter.
Results for the three months did, however, see a drop in earnings by $600,000, even though the volume of customers increasing by 3%. CUC said the drop was due to higher depreciation, transmission and distribution and finance charges. But electricity sales grew significantly, with revenues at $21.2 million for Q1, an increase of $0.9 million compared to this time last year. This was because at the end of March customers had increased by 789 to 30,734.
The customer base and revenue is likely to decline in the next set of results. The lockdown measures were imposed only during the last week of the period, but by the end of June CUC’s major commercial clients will have been closed for a full three months. While the noted increase in residential consumption is bound to offset some of the commercial decline, the closure of all the hotels and the restaurants will take its toll on profits.
President and CEO Richard Hew said that, given that the lockdown did not did not occur until the middle of March, the impact is not fully reflected in the company’s first quarter results.
“In the coming months we will be better able to assess the impact the pandemic has on the economy of the Cayman Islands and CUC’s operational and financial performance,” he said. Thanking CUC workers for their transition to home working or those who have adjusted their work methods to continue serving on the front-line, he said health and safety was a top priority.
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Water Bill yet to come.
check your fact i am not sure that government issues fuel duties to CUC
My sister paid $300 in Feb. She got stuck abroad and was out of her home for the entire month of March with all utilities off. Her march bill was $300. How is that possible? Racket!
Alden said his CUC bill is also higher. Still laughing at that one!!!
CUC solely because it is a monopoly in the provision of an essential service should reduce their charges to customers over the period of the pandemic so that they break meven during that period.
After years of guaranteed profits on the backs of Cayman consumers, the right thing is not to profiteer during this difficult period.
CUC is publicly traded and as such the market expects and has priced in reduced profit hence the fall in their share price since mid March, suggesting that the expectation is there.
CUC needs to generally do better in respect of their corporate responsibility as they do very little for the people of the Cayman Islands given their enviable position of guaranteed profits ànd monopoly status. Govt need to look at this. You (the Premier) can be heard urging landlords to be reasonable with tenants and recognize hardships brought on by the pandemic, tell CUC to do the same not just defer payment of bills for a few months. That is simply a deferral which has to be paid and if not disconnection will follow.
Half of the bill is the government fuel duty, would be easy for them to give us a break.
No, the Govt fuel duty is only a small part of the bill. (3.35% on my bill in fact.) The problem with every, single, CUC price story is people’s inability to do basic mathematics and record-keeping for themselves.
And this, with fuel costs just about bottomed out in the rest of the world, [except here of course]…..
And on top of the Holier Than Thou Alden-Economic-Crash [that doesn’t affect Alden and his band of elitists living in a bubble], This surely is not a pleasant surprise for anyone.