According to the consolidated unaudited financial statements of Caribbean Utilities Company, Ltd. for the three months ended March 31, 2024, CUC earned total revenues of $68,712,000, a slight decrease from the 2023 first quarter. These revenues comprised electricity sales revenue, the fuel factor and earnings from renewables.
Regarding electricity sales revenue, this was reported at $27,018,000, which is $2.4 million higher than last year.
CUC explained in the unaudited financial statements that “This increase is driven by the 6% kWh sales growth and the 3.7% base rate increase effective June 1, 2023.”
Concerning the fuel factor, which represents 59% of each customer’s bill in the period to March 31, 2024, CUC recorded total earnings of $40,406,000.
According to CUC, this was “a $4.7 million decrease from the $45.1 million in fuel factor revenues for Q1 2023. “
“The decrease was due to a decrease in the price of fuel partially offset by the increase in fuel consumption,” CUC explained further.
For members of the public who are trying to understand the fuel factor, CUC said that “Fuel Factor revenues consist of charges from diesel fuel and lubricating oil costs, which are passed through to consumers on a two-month lag basis with no mark-up.”
The last category of CUC revenues is renewables.
CUC reported $1,288,000 in renewables revenue, which CUC describes as “a combination of charges from the Customer Owned Renewable Energy (“CORE”) programme, Distributed Energy Resources (“DER”) and Bodden Town Solar 1, Ltd.” The amount earned for 2024 was less than 2023.
Looking forward, CUC said, “With the strong economic growth in the Cayman Islands, combined with record high average temperatures, the Company is expecting growth in the demand of electricity in 2024 and beyond.”
CUC added:
The T&D licence mandates the Company to maintain adequate reserves margins of power and requires the Company to identify additional capacity needs three years in advance.
While the Company continues its efforts on integrating additional utility-scale renewable energy, small-scale temporary generation will be utilised to reliably meet base load and accommodate the expected demand growth. CUC is committed to dispatching generating capacity prudently in accordance with the licence’s least-cost principle.
CUC continued:
In March 2024, the Company contracted to lease an additional 10MW of Temporary Generation (“Block Three”) to meet the increasing energy demand.
The lease period is for a minimum of 12 calendar months with option to renew commencing on the day the equipment will be received by the Company expectedly in Q2 2024.
Block Three will bring the total temporary generation to 20MW.
The regulatory treatment of Block Three is pending OfReg’s approval.
Members of the public interested in learning more about CUC’s operations, plans and agreements may visit https://www.cuc-cayman.com/off-the-wire/.
More about CUC
Caribbean Utilities Company, Ltd., (“CUC” or the “Company”), commenced operations as the only electric utility in Grand Cayman on May 10, 1966. Its principal activity is to generate, transmit, and distribute electricity in its licence area of Grand Cayman, Cayman Islands pursuant to a 20-year exclusive Transmission & Distribution (“T&D”) Licence and a 25-year non-exclusive Generation Licence (the “Licences”) granted by the Cayman Islands Government (the “Government”, “CIG”).
The T&D Licence, which expires in April 2028, contains provisions for an automatic 20-year renewal and the Company has reasonable expectation of renewal until April 2048.
The Generation Licence expires in November 2039.
CUC is regulated by the Cayman Islands Utility Regulation and Competition Office.
