Fuel costs fall as earnings rise for CUC

| 21/02/2017 | 8 Comments

(CNS Business): Grand Cayman’s monopoly power provider enjoyed an increase in net earnings of some $2.4 million last year but CUC said the average cost of bills still fell by almost 32% by the year-end compared to consumer bills at the end of 2014. The power provider said that the combination of a fall in global fuel prices, a cut in government duties and improved efficiency from its new 40MW plant has made power cheaper for consumers. As the firm announced its annual results for 2016 and an increase in sales and profits, it also released information on customer costs.

It said that as the average price per imperial gallon of fuel decreased by 4% to $2.07 at the end of December from $2.15 in 2015, the fall in price was passed on by CUC with a two-month lag but no mark-up. This meant residential customers who consistently use 1,000 kWh per month would have seen their monthly bills decline by about $34 during the last quarter of 2016.

CUC’s President and CEO Richard Hew said the firm was pleased customers were benefiting from the current lower fuel prices.

“We also continue to push towards getting alternative energy sources connected to the grid and with improving our overall plant fuel efficiency,” he said. “This includes the 5 MW Solar Project in Bodden Town which is on schedule to start operations by the middle of this year, the ongoing Customer Owned Renewable Energy (CORE) programme, which is nearing 4 megawatts of connected load and the installation of our 40 MW diesel plant in June last year which comprises of the most fuel=efficient diesel generators in the Caribbean.”

The company was also pleased about its own earnings. In its year-end financial report it recorded an increase in earnings, which, the firm said, was down to an increase in sales and the price increase to customers, which government’s regulator approved in June. CUC also said that lower consumer services expenses and lower finance charges helped though there were depreciation costs.

Sales increased because of the large commercial developments, the firm stated, and a 2% growth in overall customer numbers. During 2016 the average monthly kWh consumption rose 6% for residential customers and 2% for commercial customers when compared to 2015.

Hew said that 2016 was a very successful year for CUC. “Through the efforts of all of our employees, the company continued to adequately control its expenses while providing a safe, reliable and efficient service to our customers across Grand Cayman. We are very proud to have reached the milestone of 2 years without a lost time injury (LTI) on January 27, 2017. This was a notable achievement for the company’s safety record,” he added.

The Advanced Metering Infrastructure (AMI) project was completed during the fourth quarter of 2016. CUC said the Smart Meters provide real-time consumption information and bring efficiencies to meter reading as well as other services. The AMI project will offer a pay-as-you go payment option, which will help customers to monitor and control their electricity consumption later this year, CUC stated in the report.

Full CUC Press Release with graphs – Reduction in the Cost of Electricity

CUC Earnings Press Release and Annual Report 31 December 2016

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Category: Local Business, Utilities

Comments (8)

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  1. Caymanian says:

    This is a cutsie misdirection. Fuel right now is on the rise and they know they are about to hit us with a hike in fuel cost so they give us this good news to set us up for some bad news. Wait for it…….wait……wait…………..

  2. Sunrise says:

    The CEO, Mr. Richard Hew, stated that he was pleased customers were benefiting from lower fuel prices, as there were a decrease in global fuel prices. Prices of fuel are dropping worldwide, why are the Cayman Islands, still showing increases at the local petrol stations? Where is the Minister, who is responsible for regulating these increases? Why are these stations allowed to increase the cost of fuel, when global prices are dropping? I have come to the conclusion, that the elected members, are mostly puppets on a string!!!!

  3. Anonymous says:

    So will CUC forego a rate increase this year? Or is it a case of must-have increases even if they made a trillion dollars in profits??

    • Anonymous says:

      Please provide us all with the last 5 CUC base rate increases – date & amounts. Then we can judge the validity of your comment.

      • Anonymous says:

        I only asked the question. The ERA and Mr. Hew can provide the details to us all. It seems to me, however, that Govt. gives a reduction in fuel duty but in a few months, CUC raises its base rate again. So any savings to consumers get obliterated in short order. Just saying…

  4. Anonymous says:

    Just shows what we know already..they could cut prices further if they wanted too…or invest a lot more in solar which long term will cost less…

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