Water Authority asked to justify rate increase

| 21/04/2022 | 42 Comments

(CNS): The utilities regulator, OfReg, has deferred an application by the Water Authority for a rate increase asking the government-owned company’s management for more information to justify the increase. During last week’s OfReg board meeting the directors reviewed the request for a hike in prices but found that the 2020 year’s financial statements supporting the adjustment did not justify the need for an increase, according to Acting CEO Peter Gough.

“The responsibility of OfReg to ensure fair prices for the consumer also means that we must legally and impartially review and agree to any increases requested by operators and licensees,” explained Gough. “We have directed the Water Authority to provide further information to support its submission, including its 2021 financial year statements and forecasted five-year Capital Investment Plan (CIP).”

Gough added that OfReg takes its remit to ensure fair pricing and to protect consumers extremely seriously.

“It is the view of the regulator in this case that consumers should not bear an unjustified water rate increase at a time when household budgets are already stretched,” he said. “We are fully aware of the impact of global fuel prices and the knock-on effects in Cayman on energy costs and the cost of living generally.”

While the request for the price hike has been temporarily knocked back, this does not mean there will not be an increase down the line. OfReg said it would make further announcements after the additional information is submitted.

According to the summary of the 5 April Cabinet meeting, government exempted its statutory
authorities and government companies from paying into core government any surplus cash reserves as at 31 December, which is likely to include the Water Authority. However, in 2020 the WA handed over a dividend of $250,000 to government, which is its only shareholder, after making a profit of some $5 million.

While the company’s 2020 annual report has been published on its website, the 2021 accounts will not be available publicly until later in the year.

The Water Authority supplies water and offers sewage treatment services across all three Cayman Islands with the exception of West Bay. Consolidated Water, a private company that is focused on desalination, supplies water directly to that district and sells desalinated water to the government’s Water Authority.

See WA 2020 Annual Report in the CNS Library.


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Category: Business, Government Administration, Government oversight, Politics, utilities

Comments (42)

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  1. Anonymous says:

    The Water Authority Sewage treatment facility does not meet health and safety standards. The board knows about this and yet there is no action. Time for FOI.

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  2. Anonymous says:

    From Water Company to OffReg:

    We need to increase our fees to increase our profits. Thank you for understanding and approving the rate hike. BTW, how did you all like the recent all-expenses paid trip to the Dominican Republic? Please let us know how we can do better this summer for the next junket.

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  3. Anonymous says:

    Haw haw haw

  4. Anonymous says:

    Easy target, go hassle CUC and gas prices .
    Water authority is a government entity so it’s all lip service.
    Board directors fluffing their feathers , look here not there.

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  5. Anonymous says:

    As far as utility bills go, water is the least of my worries. Its the shareholder owned, monopolistic CUC thats my concern.

    And can you ask the fuel providers if they plan on reducing the price of gas at the pump now the cost of a barrel of oil has gone down?

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    • anon says:

      I asked the proprietors of a G.T. Rubis gas station if they could slightly reduce their profit margin to help our struggling workers, now that gas is $6.10 a gallon.Their answer- Rubis would put them out of business if they did – can this be true?. Can OfReg comment on this – naturally after taking consultants’ advice.

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      • Anonymous says:

        Note that many stations are owned by the supplier not the oerator you may speak to. But I do think the answer you got is BS as the profit magin is up to the operator.

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  6. Anonymous says:

    Who are the shareholders of WAC because clearly they must be on the “wrong side”

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  7. Anonymous says:

    Lip service!!

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  8. Elvis says:

    Everyone jumping on the rip off band wagon

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    • Sir Humphrey says:

      Just a fact. De-salinization is very expensive everywhere in the world. There are no exceptions. The price one pays to live on a small island with no fresh water sources.

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      • Anonymous says:

        Solar seems ideal to use for desalination, use of diesel generators, seems a waste

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      • Anonymous says:

        You stand corrected in that there are freshwater sources in Cayman albeit not currently in pristine or viable condition. Rainfall is also a source of freshwater that is no longer endorsed by Water Authority but it has sustained Cayman’s population in the past prior to massive development.

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      • Caymanian says:

        They made $5million PROFIT in 2020.

        In laymans terms that ia whats left after you pay all your bills.

        I fully get why 1. They ask for 2021 and 2. Why they ask for Capital Expediture Plan.

        In times when its already hard on your customers and cost are high you should be mindful of unnecessary capital expenditures and in general expenses.

        Its actually refreshing to read OffReg taking this stance.

        CUC you are up next.

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  9. Anonymous says:

    I wish they would ask CUC the same question

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  10. Anonymous says:

    The first item in the Water Authority’s mission statement says that they are supposed to provide affordable water on all 3 islands. Clearly they do not. In fact they don’t provide water on Little Cayman at all. But then the Water Authority is a government owned company so there is no accountability – right OfReg??

    https://www.waterauthority.ky/mission-statement

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    • Anonymous says:

      How is tap water not affordable here??

      You literally pay between 2-3 cents per gallon of tap water.

      Compare that to the gallons of water in the store that come in plastic at 100x the price.

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      • Anonymous says:

        But then you wouldn’t get your daily supplement of chemicals, VOCs, SOCs, heavy metals, and other contaminants necessary for you to be just like everyone else in the world. Here is a list of the levels that Florida recommend in their bottled water.
        https://www.fdacs.gov/content/download/72733/file/Bottled-Water-Testing-Requirements.pdf

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        • Anonymous says:

          Just in case anyone was wondering which heavy metals are best for your diet, these all come in bottled water.

          Chromium: The two common oxidation states of chromium are 3+ and 6+. The 3+ oxidation state is essential, in minute amounts, for human nutrition. Hexavalent chromium, on the other hand, is highly toxic and is a known human carcinogen. usually comes as 0.1 milligrams per litre of bottled water

          Arsenic: Technically, arsenic is a metalloid rather than a metal. But, it is toxic. Arsenic readily binds to sulfur, disrupting enzymes used in metabolism.
          Cadmium: Cadmium is a toxic metal that shares common properties with zinc and mercury. Exposure to this element can lead to a degenerative bone disease. usually comes as 0.01 milligrams per litre.

          Mercury: Mercury and its compounds are toxic. Mercury forms organometallic compounds that pose an even greater health risk than its inorganic forms. Mercury primarily causes central nervous system damage. Usually comes as 0.002 milligrams per litre.

          Lead: Like mercury, lead and its compounds damage the nervous system. There is no “safe” exposure limit to either mercury or lead. Usually comes as 0.005 milligrams per litre.

          Cheers to all the bottled-water drinkers! Then there is also the ‘smart’ water which obviously isn’t working.

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      • Anonymous says:

        Yes…and do you know how many gallons a shower takes? And more importantly that the price you mentioned is still one of (if not the) highest in the world?

        Here’s a quick and dirty little secret. The WAC gets to charge an energy adjustment factor (EAF) which is perfectly fine because it costs them energy to make the water and the energy prices fluctuate. But here’s the rub…that factor is based on a fixed amount of kWh/gallon of water which is roughly double the actual energy required to make a gallon of water. Soooo they (and Cayman Water) make profit off of the energy adjustment factor (and it’s quite a lot). Check the financial reports for publicly traded CWCO and you can see when oil is up they make extra money and visa Versa and make no qualms about it to their shareholders.

        As someone else pointed out…after paying all their upper management and all the bloated salaries for both entities and the board members salaries etc etc they are still making an absolute killing.

        And that’s why on top of reverse osmosis being the most expensive method of production in the world….we get to pay even more to subsidize this nonsense.

        Good job finally Ofreg! Forget deferrals and just refuse the damn rate hike. Same with CWCO whose rates are already higher for no reason, and as others have mentioned, CUC.

        All monopolies and all making a fortune!
        Stop them!

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  11. Anonymous says:

    CNS – a correction if you do not mind. The Water Authority has no presence and supplies nothing on Little Cayman. I called their offices about this and they said that no one there had ever heard of Little Cayman.

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  12. Anonymous says:

    Oh dear, Mr Gough. You’re acting too much like a sensible civil servant and not one of these high paid folks, sorry “experts”, ( one with a silly apron hired by his Lodge pal Chairman) who don’t really have the balls or desire to do what is necessary or the management skills to reorganize Ofreg, including firing non productive staff, and make it functional.

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    • Anonymous says:

      Whatever biased and unwarranted view you have of Mr Gough, we can all be certain that he is an Honest man.
      A rare quality nowadays, and we should be happy that he is not a UDP crony appointment..

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      • Anonymous says:

        I think you didn’t realize the post you are commenting on is actually favorable to Mr Gough. Read it again. Slowly. Carefully.

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  13. Anonymous says:

    They need to justify their billing and meters also. How a bill one month can be $50 then jump to $300 the next for the last 6 months makes no sense.

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  14. Anonymous says:

    Gough added that OfReg takes its remit to ensure fair pricing and to protect consumers extremely seriously.

    He said that without choking?

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  15. E. Benedict says:

    I wonder if the gas stations, specifically those owned by local politicians, are going to subject to this newfound sense of duty over at “The Reg”….I won’t hold my breath while I wait though!

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  16. Anonymous says:

    Stand up, OfReg. Cheers! More consumer advocacy please!

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  17. Anonymous says:

    Thankfully a civil servant is running Offreg. We might get some sensible decisions now.

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