Home Energy conservation CUC delays proposed 5.4% base rate hike

CUC delays proposed 5.4% base rate hike

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(CNS): There will be no increase in the base rate that the Caribbean Utilities Company charges customers this summer, as Grand Cayman’s electric utility delayed its annual increase until January. CUC said it made the decision not to increase the base rate, which was expected to be around 5.4%, due to “increasing financial challenges some customers are facing due to fuel price costs and ‘other goods and services’. . The CUC will also freeze disconnection fees and finance charges for bills issued from August to October.

Under the CUC license, the company can increase the rate it charges each year based on a formula tied to inflation or the price level index. This is a weighted average of 60% of the change in the Cayman Islands Consumer Price Index and 40% of the change in the US CPI. The CUC said that for 2022, the calculation led to a 5.4% increase, which would have come into effect on June 1, assuming the Office of Utilities Regulation and Competition (OfReg) had authorized this. substantial increase.

However, CUC said it had offered OfReg to postpone the rate increase and related revenue recovery until January, and OfReg agreed. CUC President and CEO Richard Hew said it would ease the burden on residents and businesses at a time when they need it most.

“CUC is committed to providing continued support to its customers and it was important that we reached an agreement with OfReg to defer rate increases relating to the energy load component of customer bills until 2023. CUC is well aware that if the increase was implemented in accordance with our licenses, an increase in base rates in June 2022 could have been difficult for many of our customers to bear,” he said. “The ability to recoup revenue in the future is necessary to maintain this financial stability and to meet society’s ongoing obligations to invest in infrastructure and provide safe, reliable and sustainable electricity service.

CUC revealed its unaudited financial accounts for the first six months of 2022 last week, which showed an increase in revenue so far this year compared to 2021 of almost $2 million. Given the volatility of fuel costs, customers paid an average of 7 cents more per kWh due to the fuel factor compared to last year, and even higher bills are expected during the hot summer months .

While the government is subsidizing fuel costs on residential bills in July, August and September for homes using less than 2,000kWh per month, customers will have to pay the full fuel factor in October and can expect a new significant increase in bills in the new year.

CUC said it would help customers lower their bills through energy-saving programs. The company also foresees additional long-term relief to customers with the implementation of large-scale renewables on its grid in the near future.

Meanwhile, an outage on Sunday morning knocked out power to around 11,000 homes. The CUC has yet to state the cause, but power was restored to everyone Sunday afternoon.

See the full CUC press release below: