CUC increases customers but earnings fall
Caribbean utilities Company (CUC)
(CNS): Grand Cayman’s power company reported a slight drop in sales during the first quarter of 2015, despite growing its customer base by some 2%. During the first three months of this year CUC saw 435 more customers connected to the grid than in 2014 and at 31 March it had 27,873 customers. But officials said the fall in sales was due to higher depreciation and transmission and distribution costs, as well as lower temperatures and decreased air-conditioning use.
Net earnings for the three months ended 31 March 2015 were $3.3 million, a fall of round $100,000 compared to earnings in 2014 for the first part of the year of $3.4 million
The average monthly temperature for the first quarter 2015 was 79.5 degrees Fahrenheit compared to average monthly temperature of 80 in 2014. “Cooler temperatures reduce air conditioning load which can negatively impact the Company’s sales,” the firm said in a release.
In the company’s announcement about its results, CEO and president Richard Hew noted a number of developments during the first part of the year, including the recent share offering which saw the firm raise some $31.5 million to pay for the installation of two new 18.5 megawatt (MW) V48/60 medium-speed diesel generating units and one 2.7 MW waste heat recovery steam turbine. When the work is completed next summer, the additional capacity will replace some of the company’s retiring generating units, Hew said.
“The new plant will be one of the most efficient in the region and is anticipated to improve CUC’s current fuel efficiency by approximately 6%,” he added.
The generation expansion project is estimated to cost around US$85 million and the firm had already raised over $50million last year in its first share offering. In March the firm sold close to another three million shares at $10.77. CUC’s existing major shareholder Fortis purchased a significant chunk of the shares, increasing its holding in the local power firm by 1.5% to over 60%.
During this quarter CUC also agreed on revisions to the feed-in tariffs programme, which now allows for 4MW of Consumer-Owned Renewable Energy (CORE) Generation.
“We are very pleased with the uptake for CORE, which currently has a subscribed capacity of approximately 2.6MW,” Hew said. “We believe the programme, along with the 5 MW solar project proposed by the company and currently under review by the ERA, will provide environmental benefits without negatively impacting cost and reliability of service on our small island grid.”
Despite some major disruptions to power in the capital last month, CUC said that during the first quarter reliability, measured by the average service availability index, was 99.95%.
Meanwhile, there was some good news for customers, many of whom continue to grapple with very high power bills. With a fall in the cost fuel during the first quarter of the year as well as the Cayman Islands Government’s reduction of import duty, customers saw lower bills for the start of the year.
See full report of CUC’s first quarter results and related management’s discussion and Analysis
Category: Local Business, Utilities
