Development drove CUC’s 2021 profits

| 14/02/2022 | 37 Comments
Cayman News Service
CUC Prospect substation

(CNS): The growth in the number of new homes and commercial premises across Grand Cayman fuelled the profits for the local power provider, Caribbean Utilities Company, last year, by increasing its customer base. Although there were few tourists, there was a 3% increase in sales in 2021 resulting from the completion of new condominiums, family homes and commercial buildings.

As at 31 December 2021, CUC had increased its customers to 32,185, compared to 31,293 at the end of 2020, which led to an increase in the company’s net earnings of over CI$4.2 million compared to the previous year.

President and CEO Richard Hew said that during the past two years CUC has invested over $100 million in infrastructure, and despite the challenges relating to COVID-19 and the border remaining largely closed to tourists, the company made good progress on a number of projects in 2021.

“The economy proved to be resilient, showing growth in the financial services sector and in the construction sector with new condominiums, commercial buildings and single-family homes driving the Company’s 3% kWh sales growth. We are very proud of the excellent service provided by our employees who have been able to quickly adapt throughout a multitude of changing circumstances,” he said in a press release about the results and the company’s annual report.

The government has already admitted that it remains dependent on development, regardless of the claimed policies of sustainable development. Now CUC has also shown how continuous construction is helping prop up its business in the absence of tourism and just how much of the local economic success relies on develoment, undermining hopes that the country can begin to reclaim its lost natural habitat any time soon.

With development ensuring another profitable year for the monopoly power provider, officials revealed only a slight increase in the amount of fuel CUC generated through the purchase of renewables, suggesting that the company, like the country, remains a long way from the target of meeting up to 60% of electricity needs from renewable energy in the next fifteen years.

The company did, however, conclude a request for proposals for a 20-megawatt utility-scale battery for its instantaneous reserves project.

“The primary function of the utility-scale battery is to provide instantaneous or ‘spinning’ reserve in the event of a sudden loss in power generation,” the company stated in the report. “By replacing the spinning reserve normally provided by CUC’s online generators, fewer generators will need to be online, significantly reducing the amount of fuel consumed for electricity production. As a direct result of this project, the Company expects that the initial magnitude of savings to the customers will be around $1 million per annum.”

This project, which will also provide the grid stability necessary to integrate higher levels of intermittent renewables, is scheduled for completion in 2023.

But the report also shows that, despite the price increases and volatility of the gas market in the last year, CUC is sticking to the recommendation in its Integrated Resource Plan to use natural gas as a diesel fuel replacement.

Hew also said the company was monitoring “the impact of rising fuel costs on customer bills” and was “actively engaged with the Utility Regulation and Competition Office on this as well as a number of related projects to reduce rising fuel costs”.

See the full press release and CUC’s 2021 Annual Report.


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Category: Business, utilities

Comments (37)

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  1. Say it like it is says:

    Over the years one constant factor – CUC profits go up, one other constant factor Ofreg (or it’s predecessor)authorise their rates to go up as well. Nirvana is the deal that CUC has, whatever they do their profit margin is guaranteed.

  2. Anonymous says:

    How long can an economy built on development last

  3. Anonymous says:

    CUC is not a “monopoly power provider” they do have the monopoly on power distribution. Many individuals and a few companies provide power to the distribution network for which they are paid.

  4. Anonymous says:

    🎵🎵 CUC 🎵🎵

    🎵🎵 You got NO power 🎵🎵

    🎵🎵 CUC 🎵🎵

  5. Anonymous says:

    12:49;
    We might be able to buy CUCs shares if we had the money but we don’t because the bills get bigger every time you receive them.

    Must be easy for you, do you work there, have a sh*t ton of money or live in La-La Land?

  6. Anonymous says:

    For all the complainers, anyone can buy CUC stock. Similar to most utilities, the stock generally moves a few percent a year and pays a dividend. Current dividend yield is 4.67%.

    Essentially, like owning a high-grade corporate bond, with a bit more price risk.

    • Anonymous says:

      Or give us solar. I won’t take money from earth destroying old tech.

    • Annoyed says:

      Why would I want to invest in this most inefficient of companies with a disastrous (for Cayman) monopoly driven by a horrible economic incentive model designed to increase pollution of this beautiful island/planet?

      Why don’t CUC stop bleeding this country dry? This is the most egregiously regressive tax on the poor and it is insulting to invite those worst affected, living paycheque to paycheque, to invest in this arrangement.

    • Anonymous says:

      No thanks

    • Anonymous says:

      I own CUC stocks but I wonder where all the dividends really are? Inflation I suspect is running north of the 7% (don’t know what ESO says)

      Dividends have stayed around static for a good 10 years despite spikes in inflation.

      CUC has provision in contract for inflation and I am wonder when the board will use those.

      If nothing changes, I’ll dump the 20K in CUC shares and buy some panels and collect $200 in dividends a month instead of $220 odd quarterly.

      They [Directors] don’t get their retainers to keep this at 15 a share and pay 5%. I’m getting diluted by inflation and the bill and they need to hike the dividend already.

  7. Anonymous says:

    Every time I see/read an article on CUC’s quarterly/yearly profits its like getting a kick in the nuts and reminded that piracy is alive ad well in the Cayman Islands.

  8. Anonymous says:

    We need more solar less toxic cuc.

    • Anonymous says:

      Go ahead and install solar in your house then.

      • Anonymous says:

        Have you been under a rock?

        • Anonymous says:

          No, it’s just unbelievably expensive to do in Cayman.

          • Anonymous says:

            So now maybe you understand CUC’s rates a bit better…it’s very expensive for them as well.

        • Anonymous says:

          What do you mean? It’s a fair comment. If you don’t want to use CUC don’t use them and install your own solar and batteries and go off grid.

          • Anonymous says:

            I dn’t think you have ever priced off grid solat in Cayman. Literally 20 years to break even. Guess what? The panels and batteries and external wiring will not last that long.

          • Anonymous says:

            It’s expensive here and you don’t get your monies worth as fast. Not everyone can afford it because the government is CUC.

          • Anonymous says:

            i could’ve sworn you needed permission to install solar units etc on your household.

            • Anonymous says:

              Water Authority prices are the highest in the whole world,mostly to people not working much and lots of waste

      • Smarter ways to outsmart CUC says:

        It makes more sense and more economically feasible to insulate your house to the t|t$ than invest in photovoltaic solar.

        Besides the lump sump required to buy PV panels, roof mounting system, BATTERIES, inverter, wiring and labour requires most people to take out a second mortgage on their home if wanting to power their air conditioning systems and major appliances. At least retrofitting insulation and lighting conversation can be done in increments without all the hassle.

        Solar hot water heating is a no brainier and is now available for the cost of your washer or dryer. Better yet is a propane on demand water heater for under a 1000$ US. Finally switch out your dryer and stove to propane which will save 2/3 the cost of electric powered units. This is not rocket science and CUC can’t stop you doing all this and greatly reducing your bill.

        If you are doing a new build and plan to live in your home for at least 10 years consider drilling a 10” well at least 100’ into an open zone (not tight rock formation). This can serve as your heat exchange well for your air conditioning.

        All this in place your monthly bill will be under a $100/month for a 2000sqft house. And CUC can’t threaten to cut you off for strangling them out either.

  9. Anonymous says:

    It’s CUC’s deal with CIG on 30% margins that drives profits and tax-free dividends. The load factor is just the amplifier of that number, averaging along with normal weather. It’s very hard to disrupt that model with new technology, since competition isn’t allowed. CUC can just pretend to be adopting greentech at whatever pace it decides and the public has no recourse if they fail on their casual internal targets. There are no CSR targets, or active ESG criteria. It’s also unclear where some of the CI Road Fund tax collections goes, as it seems to be excluded from reporting in SEDAR exchange filings.

    • Anonymous says:

      It’s 15%.

    • Anonymous says:

      Perhaps, just perhaps, if you broke down the acronyms you may get more buy-in from the uniformed.

      Hence more political support for your position brought about by the lobbying of those “now informed”.

      Other than that, your post simply shows some knowledge superiority which is useless on this site.

    • NoToday_Bobo says:

      The Roads Fund specifically EXCLUDES any duty on Diesel Fuel that is used for electricity generation.

    • They paved Paradise.... says:

      Please explain what you mean by 30% margins.

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