CUC rolls out 5.8% delayed base rate hike
(CNS): Residents across Grand Cayman can expect to see a significant increase in their electricity bills next month when CUC’s base rate hike, deferred from the summer, and the fuel increase, which was also delayed, are rolled out and the power provider starts to recoup the missing earnings since the deferrals. The 5.4% increase to the base rate was calculated and approved by OfReg when inflation was at around 12%, compared to the estimated 9% at present, and comes just as the government’s subsidy on domestic bills comes to an end.
CUC, which just announced a dividend of 70 cents for shareholders for 2022, said the hike had been intended to be effective for consumption from 1 June last year, but with fuel prices through the roof, the regulator approve a postponement. However, OfReg has approved not just the implementation of the hike at the rate calculated early last year but is also allowing CUC to recoup the missing six months.
George Ebanks, the chair of OfReg’s new Consumer Council, told CNS that he has some concerns about the rollout of the increase. “Recent bank loan interest rate increases and other global inflationary pressures make this retroactive CUC rate hike increase one of its largest, if not the largest, ever seen in these islands. It is unjustified and unreasonable,” he said, adding that the council has plans to look closely at long-held public concerns about the cost of electricity.
In a press release announcing the increase to the base rate and deferred costs, CUC said it will increase bills for the average residential customer using 1,000 kilowatt-hours of electricity per month by around CI$5.31. The recovery of the fuel costs from the last three months of 2022 will also be added to the bills throughout the year, adding $0.0075 per kWh used.
President and CEO of CUC, Richard Hew, said that CUC, like most businesses in Grand Cayman and across the world, was facing increasing costs of goods and services. But the company’s anticipated annual results, given the dividend and results as of 30 September, where earnings were already up for CUC on 2021 by 10%, are expected to be favourable. Hew said that while CUC was able to defer increases in its rates to customers over the past six months, “a rate increase is now necessary for CUC to meet its obligations to serve the public safely and reliably”.
As the clock ticks on the government’s National Energy Policy target that calls for 70% of electricity to be generated from renewables within the next 14 years, a goal it looks increasingly unlikely, CUC said it continues to advocate for more utility-scale renewable energy on the grid as it will mean more competitive and stable rates when compared to the cost of diesel.
For more information about the terms of the CUC licence, the rate cap adjustment mechanism, and the Energy Smart programme, visit the CUC website or the OfReg website
- Fascinated
- Happy
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- Bored
- Afraid
I have no conflict of interest with CUC, and I fully intend to work with Gov; via OfReg to strengthen the existing Utilities Regulation Law, 2016 to allow for the current modus operandi to stop!
Yes, it will not be done overnight, but I can PROMISE our consumers that this Consumer Council is willing to act!
Yes, act to protect YOUR Consumer rights more fully!
Better days are coming, that I can assure all.
Successive regimes have committed the people of the Cayman Islands to a library of amateur unqualified high cost deals, many of them secret or wholly redacted because they are so embarrassingly conflicted and/or bad. CUC’s $100mln 5MW solar deal doesn’t make sense and should be referred to the FCU for investigation. Those signing-off and committing the public to these financial heists need to understand they could be prosecuted in an accountable society. All evidence so far to the contrary. Best of luck.
What in God’s name are you talking about? That solar farm is owned by one of Richard Branson’s companies.
All of this is just a joke
CUC always make money
There are so many extremely wealthy people living on this island.
No one cares about the working class.
The divide of the have and the have nots is huge in Cayman
Everything is going UPPPP!
Except Minimum Wage$$$$
Rilley Cayman??
Tourism Caymankind staff still earning only $4.50/hour and the Minister is running dung Luxury Hotel Yachts?!!
Don’t start with the Tips argument.
Ask the workers how visitor tips are very Low now!
Ask any local bank if they consider tips…
Still only 3% of electricity from renewable (free) sources.
Not even worth mentioning, it’s obviously not going to happen. Wait for it, they move the goal post out another 10 years soon.
Not free. CIG allowed CUC to bake in a $70mln consumer-financed infrastructure spread with 6 more gov’t sanctioned scams planned. They must all own CUC stock.
and making darn excuses for it. BUT that is our fault. If stood up like REALLY stood up threatening and following up on threats to politicians to FORCE change we could get somewhere.
Good job CUC and Ofreg! (Dripping with sarcasm). Every single year these guys get their increase and every single year it’s a different excuse they feed to the public about why they did it.
It’s pretty simple: they’re contractually allowed to (thanks to the worst contract I’ve ever read) and it means more money for them, and nobody with the power to stop them cares enough to do so.
Long live monopoly utilities 🙁
I have a question, who decides the cost of electricity- is it the company directors or OFREG? Is OFREG just the Regulator? I am a bit confused.
In every conspiracy, it’s a group that decides and then colludes together for their chosen outcome.
The Company (Directors) decide the price of electricity. They are bound by contract (operating licence) on how much they can charge (which is their costs plus a pecentage, can go pretty high, etc.). OfReg is just the regulator. So OfReg will check that the price increase is not outside the terms of CUC’s contract with Government but they cannot tell CUC what to charge.
Is my understanding.
Just wait till CUC purchases grid battery storage units they promised. OfReg most likely have already pre approved and rubber stamped another rate hike for that.
Georgie Peorgie and his crew are being paid by our tax dollars to act the devil’s advocate, spew a weak protest but ultimately capitulate.
Decision makers at OfReg and the whole membership of Consumer Counsil probably hold CUC shares, ethically they should not as they are supporting CUC’s licence to print money.
I have no conflict of interest with CUC, and I fully intend to work with Gov; via OfReg to strengthen the existing Utilities Regulation Law, 2016 to allow for the current modus operandi to stop!
Yes, it will not be done overnight, but I can PROMISE our consumers that this Consumer Council is willing to act!
Yes, act to protect YOUR Consumer rights more fully!
Better days are coming, that I can assure all.
Explain to me like I’m 5 why customers cannot put solar panels on their house, to power their house when they can during the day, while also remaining connected to the grid for power at night? Please explain without using the term Shareholders. Outlaw the kicking of people off the grid for powering their own home and Cayman’s carbon footprint will plummet over 10 years. CUC needs to stop having the Gov’t protect them from competition.
It’s the high ups in CIG that have shares in the utilities. Why the hell would they allow the monopoly to be broken?
The hundreds of millions spent on the power generation infrastructure is based on the expectation to recoup that money through customers.
I believe this is why even though it would be very easy to fully power the Brac/LCM by solar, it won’t happen.
If CUC suddenly lost half of their customers because we converted to solar, they’d be up shit creek without a paddle.
That’s why they want – and need – to control the roll out of renewables. However, it’s a cat and mouse game due to the fact that solar and energy storage just gets cheaper by the year.
CUC stock is also the retirement income vehicle for most of wealthier folks in Cayman. A stable all-season stock price with close to 5% tax-free dividend yield makes it one of the better conservative growth and income investments out there, secured by a utility-friendly monopolistic government willing to hold its nose and let money disappear.
My understanding is that
You can put solar panels on your home, and remain connected to the grid. But it is expensive. What CUC restrict is (a) how you do that (for safety) and (b) if they will buy your (excess) power from you and at what rate (CORE).
(a) is a non-issue (technically though not economically speaking) as its just making sure the connection is done in such a way as to not feed electricity into the wires when the linesmen think they are unpowered, i.e, when the CUC power goes out your solar panels stop putting electricity out to the CUC power lines.
(b) is the problem. What it means is that unless you are in the buyback system (CORE) it is uneconomical to put the solar panels up so ‘no one’ does it. Otherwise you would be giving CUC your excess energy for free during the day and then paying them full cost at night. (Though you could, hypothetically, put just one panel on your house and use less than you produce during the day as well, but most people find that uneconomical given the cost of the hookup for one panel since their KWH price for solar is, probably, higher than CUC’s KWH price.)
What people are really arguing about is that CORE needs to be expanded, a lot. Encouraging exactly what you have proposed. But that would cost CUC money in extra equipment needs. Costs they would pass on to all consumers. And CUC is focused on the cheapest supply of 24hr power they can produce because people complain so much about the electricity rates as it is. In short it still remains cheaper to burn diesel than use solar. If you do not account for the pollution costs, nor the social benefits of distributed rooftop consumer solar. Neither cost nor benefit that accrue to CUC. Which is why OfReg/CIG are needed to make CUC expand CORE a lot. (Even if it drives up our electricity costs a little bit in the short term.) An outcome they have so far failed to accomplish.
I hope that helped.
As far as I understand it’s pretty simple. You hook up solar to your house, however you also have a bank of batteries that will power your house when there is no sun, i.e. at night, rainy days.
I had 2 old window units in a small 1 bedroom (about 600sq feet). I installed 2 new spilt units about a month ago.
So far I don’t need a/c in the day, only use it at night. My bill went from $300ish to over $500 in one month.
Between the price of food and electricity, rent/mortgage. There is no way I can keep my head above water.
I’m single, make a decent salary, but when I’m spending $100+ every time I go to the supermarket, to grab needed items about 4 times a week it’s ridiculous.
about time…. ppl need to face the reality of the world and stop relying on government hand-outs…… an endless inflationary cycle….
CIG handed out nothing. Not a dime in subsidized consumer relief. Read the article, or just wait for your next bill. Then assume the position, and try to relax if you can.
Pain deferral is not a hand-out. There was no consumer relief conferred, just a lingering consumer IOU payable. Global inflation is also not a forgone certainty, or endless, but this double burden is going to be applied at the worst time, at or near peak, as if to confirm the stupidity of our leadership. PPM weren’t economists either, so most should be calloused already from past fails. Doesn’t mean it’s not disappointing.
None of CUC, their shareholder dividend recipients, CIG, and OfReg can be trusted to build-out necessary renewable infrastructure at true real world cost, or pass along any consumer savings. Fuel prices should be much lower, not higher. PVC panel costs and installed cost per watt are going down, not up. Duty free. Consumers are being hustled every which way, and there are no watchdogs guarding our interests.
@8:45am. We agree fully with you. We the good people of these Cayman Islands have a vote. Each of us! And we are watching, and losing patience with this Government; and past Governments also; of being idle and either unwilling or unable (and if the latter, we will vote for change and a NEW Government in 2025!) if a new push, at the national level, is not now made to encourage and promote, and even to subsidize a turn towards (a push!)Renewable Energy in these Cayman Islands.
Stop allowing CUC to stop Renewable Energy forward March!
We can vote. We will vote in 2025 for change!
We want Renewable Energy to be made a National Priority!
The real world cost of the most efficient home monocrystalline solar has come down to just USD$1.00-1.50 per installed watt, and solar panels are duty free imports. Despite those very competitive metrics, the Unity CIG recently allowed CUC to charge the Cayman public >KYD$20.00 per watt for the commercial wholesale installation of just 5MW of solar. That has to be some kind of world record cost over-run.
Is it just me confused here? So government lowered the cost of fuel but CUC is allowed to a rate hike? Just cannot make this stuff up! Wayne, please go on your “media platform” of choice and explain exactly how it is ok to allow and your government agency Water Authority (cannot forget them!) to bring more hardship on us! Forget the damn cats and chickens and do something tangible to reduce this spiraling cost of living! Help us the struggling people out here!
Welcome to the house of pain
Let me get this straight. Government LOWERS the fuel costs. So electricity becomes cheaper.
so naturally CUC raises their rates. Gotcha…did i miss anything in the middle?
Yes, you missed a lot. Gov’t never agreed to subsidize consumer CUC bills. The opposite: they agreed to a colossal consumer price hike, delaying payment temporarily and are now allowing CUC to raise rates as agreed AND clawback a half year of approved margins. CIG also previously agreed to let CUC reclaim from consumers $100mln for a duty free 5MW solar farm with real world installed cost of less than $6mln. Even if the 22acres in rural Bodden Town cost $1mln per acre, it’s at least a $70mln hustle, with 6 more planned.
So I am now required to pay last year’s costs as well as the current months rate increases! Nobody asked me if I wanted to delay payment. I would not have chosen this. Who can I sue?