CUC claims it was kept in dark over FOI appeal
(CNS): In a judicial review hearing, in which CUC is challenging a decision by the Office of the Ombudsman (OMB) ordering the release of two of its industry reports held by OfReg, the power company argued that it was treated unfairly when it wasn’t invited to take part in a hearing that led to the order. The matter was investigated by the OMB after a freedom of information applicant appealed the original refusal by the regulator to release a Cost of Service Study and the Incremental Distributed Solar report.
More than two years ago, James Whittaker, the president of the Cayman Renewable Energy Association, made the FOI request to OfReg for the release of the reports. The COSS was produced for the regulator to justify why CUC should be cleared to increase its base rate while the IDSS concerned the grid’s capacity to carry solar.
Both studies contain important information relating to Cayman’s very slow progress in moving from diesel, CUC’s main source of power generation, to renewables, as well as the cost of electricity in general, which is one of the causes of the soaring cost of living. The OMB considered the release of these studies to be very much in the public interest.
As the judicial review opened before Justice Jalil Asif on Wednesday, Chris Buttler KC, representing CUC, told the court that the company was never informed about the appeal or invited to take part to argue why the reports compiled by CUC should not be released.
Given that the Freedom of Information Act relates only to the public sector, the request for the release of these reports was made to OfReg, the government regulator. It was then OfReg’s duty to contact CUC, as the third party, about the potential release. If there was a lawful reason to withhold the documents, then it was OfReg that would be tasked with arguing the case for non-disclosure.
But Buttler said OfReg’s submissions during the appeal were “woefully inadequate” and did not address the questions that had been repeatedly asked by the OMB about why the reports should not be released. Butler argued that CUC had been treated unfairly and unjustly. He said the company should have been allowed to make submissions on why the reports, which it claims are commercially sensitive, should not be released. Instead, it was left out of the proceedings and not given a chance to have its say.
OfReg had argued during the OMB appeal hearing that, aside from containing commercially sensitive material, the reports would also form part of a competitive bid process regarding future utility solar generation and should therefore not be released while that process was underway. However, the ombudsman found that OfReg failed to show a connection between the records and the bidding process or any potential commercial harm to CUC if the reports were made public.
Buttler argued that CUC was not given a proper chance to make accurate submissions and correct the ones made by OfReg. He said the regulator’s submissions fell far short of what CUC felt needed to be given to the ombudsman about why the documents should not be disclosed. As a result, the company had been treated unfairly.
CUC was aware of the original FOI request and the informal pre-appeal hearings that began after it was refused and Whittaker appealed to the OMB. But it appears that CUC was excluded from the formal appeal process, and neither OfReg nor the OMB contacted the company with updates on the status of the appeal.
In February last year, Ombudsman Sharon Roulstone published the results of the hearing. In her findings, she raised concerns about CUC’s role in creating the specifications for the bidding process, as the company would also be taking part in the bid, creating a real conflict of interest. This ultimately played a part in her direction to order OfReg to release the studies.
But Buttler claimed this was an “erroneous finding” because CUC was not designing the Request for Proposals. The OMB had never asked CUC about its role, leaving it to OfReg to argue its case, which the lawyer repeatedly said fell far short of what was needed. He said that CUC was in the best position to answer all of the questions and concerns raised by the ombudsman but had never been given the opportunity to make its own case.
In this judicial review, CUC is not asking the court to rule on whether or not the reports should be released, but to order a new OMB appeal hearing in which it can make its own submissions to justify keeping the reports under wraps.
The case continues.
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Category: Business, Politics, Private Sector Oversight, utilities
OMB has capability issues!!
I think people forget that electricity generation on our island is not a monopoly. Anyone can offer to build generation when the regulator tenders it.
CUC does run most of the generation – but only because their tendered price was less than other bidders. Yes we all moan about CUC, but the alternative would have resulted in even higher prices!
CUC is a huge asset to Cayman. Certainly historically. But they are a monopoly and to suggest otherwise is pure nonsense. What is now transpiring is that they also very much act like a monopoly. And action always speaks louder than words.
I think their actions demonstrate that they are looking for a fair process. I would want the same.
No. Their actions clearly demonstrate their monopolistic stance whilst playing victim as soon as they are challenged. Classic.
Misleading and lacks understanding. CUC has a monopoly on T&d and they use that exclusive position of power to ‘control’ generation. Which is why for years now no third party has been able to produce solar power outside the programs which they control and demonstrably have stopped multiple times claiming grid capacity risk and thus grid instability even when solar energy was at 1% energy penetration levels. The grid studies they are trying to keep from public view were the basis of this attempt to control generation and they do not want that info being seen by the public. You can probably guess why. Regardless, your understanding of CUC’s role in generation is either misunderstood or intentionally misleading.
— JW
I believe your comments are misleading too.
Nobody has produced solar outside the existing programme since the regulator has not issued any tenders – nothing to do with CUC. OfReg has been talking about issuing a tender since around 2021/2022, but it has not come out yet. Hopefully it won’t be long since grid scale generation will reduce the reliance on diesel and lower our electricity prices.
There is an existing programme for residential solar, which is approved by the regulator. This programme is open to anyone and is not oversubscribed. I have not been able to find any publication that claims that grid capacity is limiting this programme. What I have found is a lot of publications from overseas where too much solar has caused issues with the electricity system. So it looks like there needs to be some form of control over what is put in where.
I have also found information saying that the electricity wires need to be big enough to handle where generation goes. If it is built in the wrong place then the power cannot get to where customers are, not without expensive upgrades that customers ultimately pay for.
Personally I think there is a place for home solar and also grid solar, especially if the latter reduces my bill. What I would like to see is the people in the industry making the effort to talk to each other about how to get it to work rather than just throwing rocks all the time.
All the info needs to be out in the open. That’s the price CUC must pay in exchange for their quasi-monopoly. They don’t want to pay the price? Too bad. To Cayman government: MAKE THEM PAY IT.
Dear Mr James W. I am thinking of starting up a distributed solar business. Can you share how much you buy your panels and inverters for and outline the profit margin you make please.
Perhaps you can post it here so it is transparent to everyone who is also thinking of developing a solar company.
Thank you.
First, you are wrong: I am not James W. (although I admire him greatly). Second, there’s a huge distinction you seem to be missing: People are forced to buy from CUC because of their monopoly status — but no one is forced to buy from James W. Therefore, there is no reason that James W., who owns a private company, should have to share his financial information.
That is so far from the truth.
There is a line on my bill every month. I think it is termed renewable energy. Everyone one of us who doesn’t have solar on our houses are paying the people who do.
THE DISTRIBUTED SOLAR INDUSTRY SHOULD BE REGULATED
Actually you are very wrong. You are paying CUC for people to have solar as it is baked into their base rate.
It is your Sir who is misled. That line on your bill is for payments CUC have to make to people who have solar on their houses.
It is completely separate to their base rate. That is why it is listed as a separate line item on the bills.
I don’t think you will get a response from that question.
Finding out that the distribution solar companies are holding the prices high and lobbying to ensure cheap grid scale renewables are not put in place since the price of electricity may reduce and so will their profits!!
How exactly do the companies who DONT have a monopoly license and who have to compete openly with each other for which consumers are able to freely choose between them ‘hold prices high’? Thats rhetorical of course, as we know it doesn’t make any sense, and it’s more likely this commentary comes from an allegiance to the one company here who does.
You guys really do put in quite the effort in these comment sections to try and control the narrative. Kind of like going on talk shows but only on the basis that nobody else is there to challenge your claims.
Simple – You have been lobbying for higher payments for people who generate with their home solar systems. OfReg has recently increased the rate you are paid, and as a consumer who doesn’t have solar I end up paying a higher bill.
If grid scale solar went in electricity prices would fall. There would be pressure to reduce the rate that home solar is paid since it would be so much high than other forms of generation. If that rate reduced the payback on investing in a home solar would be unfavorable. This would result in less investment in home solar and your business suffers.
Your narrative aligns with keeping prices high so your personal business will gain. As a consumer that is impacted by that I am concerned.
If no one buys it, or able to buy it then businesses fail. Lobbying has occurred for programs to exist in the first place.
Go on his website and check it out yourself. Nothing is hidden or secret with that. Additionally, there is no important duty on solar panels from Cayman Islands Customs.
With all due respect I think you misread my post. I was not asking for the retail price on distribution solar systems. I can see that on the web and also can see that prices for home solar systems in Cayman are a lot more than other countries. I would like to know how much profit those companies are making.
Why I hear you ask. Basically everyone who doesn’t not have solar is paying for the people with solar. If companies like Solartech are keeping prices high and also lobby against cheaper forms of renewable generation I as a consumer without solar has to pay for it.
Everyone selling generation to me should be regulated.
I welcome you to do so. I have always supported a robust market of ‘fair’ competition and that’s what this court proceeding is ultimately about ensuring. As for pricing, you can get quotes from multiple companies here and compare that to North American prices (the data of which is publicly available online) and you will see they are very comparable and all solar equipment used here must legally be North American certified.
PS— You give yourself away with the ‘distributed solar’ commentary, only folks in the energy business typically use this verbiage. (Wink, wink) I guess the real difference is I’m never afraid to put my name to what I say publicly, so you won’t ever have to guess if it’s me regarding anything I say. I guess that makes one of us and that says a lot in itself.
My sister lives in Sydney, Australia. Her solar system cost less than half what I was quoted for my house here, and the equipment she got was high quality branded equipment. She had to go through her electricity company and regional government office to gain approval since they have some very strict standards there.
Perhaps you can tell me why US certification results in the doubling in price for us here, especially since there is no import duty on solar equipment?
Have you thought about how to reduced prices so more people can afford solar on our houses?
Good job CUC and your boss Richard Hew. The people do not need to know what is going on. You do such a great job on keeping our electricity flowing, just charge whatever you feel you need because these jokers will just have to pay it. To bad Joey Hew and PPM did not get in because they would have shut this review down.
He would certainly have tried. Wouldn’t want his brother shown up in public. I also believe he is a shareholder in CUC – and was when he was Minister of Energy. Extraordinary that he was allowed to hold this position given the multiple conflicts. Cayman losing again.
‘Bout time someone turned the lights off on CUC, but for the wrong reasons. But what a baseless excuse. Again OfReg fiddles but the lame duck regulator lost the plot when it was inaugurated so this is no surprise. The circus and squander continues. Too many politician’s and VIP’s preferential shares at stake so I wouldn’t be in the least bit surprised if the judicial review either gets quashed or ends up sealed in the interest of national security.
Such hateful comments about CUC, who in my view provides a great service to us. I wonder about your motives and intent.
The FOIA applies to public authorities of which CUC is not one. If CUC wants the benefit of the FOIA process, it should be so appointed. It suits CUC not to be appointed a public authority so it can avoid the FOI regime then claim the process, which was between the ombudsman and OfReg, was unfair. The ombudsman’s decision went against CUC and CUC is used to getting its way. That’s all this is about.
CUC is not a public body but OfReg is. Thats who’s being FOIed in this case regarding CUC.
CUC is really out of line taking the Ombudsman to court just because they didn’t like an FOI decision that went against them. This came out of an appeal about OfReg and instead of accepting the process under the FOI Act they’re trying to bully their way out of it with a judicial review. That’s not what the system is for. It’s hard to watch a monopoly utility flex its power like this against an office meant to hold public bodies accountable. Feels like they’re trying to send a message to anyone who challenges them and it’s not a good one.
Due process does not appear to have been followed – that is the point being debated. From a legal perspective a JR is the only way to appeal this.
So the point you make about CUC flexing monopoly powers is completely wrong.
You are very misinformed to think this is appropriate. The FOI act applies to public authorities, the puclic authority who should take the ombudsman to JR is ofreg – not CUC.
Incompetence and nepotism combined. The country and the people losing out again to the gain of CUC and their shareholders most of whom are not Caymanian or reside in Cayman. But CUC sponsors kids football and the like so everything is OK.
The most spot on comment on this thread.
So exactly what am I as a consumer losing out on?
I don’t know what the cost study is about, but I do know that CUC is regulated – so unlike any normal business they are not allowed to just charge more to make outrageous profits. Their income is capped.
I think distributed solar is a great thing, but it is expensive and I cannot afford it. Instead every month there is a line item on my bill where I pay for all the people with solar. That doesn’t appear fair.
Is the distributed solar industry regulated? Perhaps it should be since as a consumer I am paying for it.
So are you saying the distributed solar industry is not regulated although it appears on our bills?
Sounds like it should be regulated the same as other generation means.
I always wondered why CUC has a Renewable Energy charge in our bill. Isn’t that fraudulent billing?
I don’t think so. CUC have to pay the people who have solar on their houses. They then pass that onto us consumers who don’t have solar.
So we are are paying for the residential solar. I believe at a cost more than it costs for making electricity using diesel.
A great deal for people with solar. Not a deal at all for the people who don’t.
CUC should really give up their sanctimonious CSR and marketing efforts. Could save a salary or two and a few pennies for each of us “customers”.
OfReg screwed-up. What’s new?? That department MUST be investigated by the new Govt for gross waste of public funds and delivering NOTHING of substance!!