Fuel bills finally falling

| 28/11/2008

(CNS): As the price of fuel decreases on the world markets, CUC said this week that its customer’s bills in Grand Cayman are now coming down. The Fuel factor for November is 22 cents falling from an all time high of 27 in September and while the fuel factor is still higher than the start of the year’s rate of 18 cents, the firm’s CEO Richard Hewsaid it should fall to 17 cents next month.

 

The cost of diesel fuel used in the generation of electricity is passed on to consumers as a separate line item on their monthly electricity bills, without mark up CUC said but that customers can see the exact cost of fuel used to generate the electricity they used under the line entitled “Fuel Charge”, which is comprised of the fuel factor multiplied by the number of kilowatt hours they consumed during the billing period.

The fuel factor is the per kilowatt hour charge for fuel which over the past few months has been as follows: January 0.18; February 0.18; March $0.18; April 0.19; May0.21; June 0.22; July 0.22; August 0.26; September 0.27; October 0.25 and November 0.22/

“We expect the December fuel factor to be in the range of CI$0.17 reflecting the dramatic drop in fossil fuel and refined product costs,” said President and CEO of Caribbean Utilities Company, Ltd,  Richard Hew.  “I am pleased to see that the cost of fuel has been coming down and customers are seeing lower bills.  CUC uses its volume fuel purchasing power under long term contracts to minimize fuel costs and passes these costs directly through to customers. None-the-less, fuel costs are subject market fluctuations driven by worldwide supply and demand. ”

He encouraged customers to still minimize their consumption by following conservation practices outlined in the Energy Smart section of CUC’s website.  In particular, consumers purchasing appliances can help reduce consumption by understanding appliance energy ratings and choosing high efficiency units.

Meanwhile, according to the second quarter results for 2008 the firm said earnings on Class A Ordinary Shares were $5.3 million or $0.18 per share down in comparison compared to the $6.1 million or $0.24 per share for the second quarter of fiscal 2008.

“We continued to experience growth in demand for electricity in the second quarter of fiscal 2009 as ongoing commercial and residential construction projects came online,” Hew said. “Electricity sales Electricity sales were up 4 per cent over the second quarter of fiscal 2008 despite above average rainfall and below average temperatures during the month of October. A new peak load high of 93.7 MW was achieved in August.” He added that the Company continues to monitor the weakening global economic indicators and to assess the potential impact on the growth of electricity sales in Grand Cayman.

The firm said that the 30 percent decline in earnings per share for the six month period was due principally to the removal of the Hurricane Ivan Cost Recovery Surcharge and a

3.25 per cent rate reduction, both in January of 2008, partially offset by 4 per cent KiloWatt-hour (“kWh”) sales growth.

Operating revenues for the second quarter were $63.2 million, a 32% increase over $44.6 million for the same period last year. This $17.6 million increase was driven principally by a 54 per cent increase in fuel factor revenues, which were offset by higher fuel expenses. Total electricity sales for the quarter increased 4 per cent to 145.8 million kWh from 139.7 million kWh for the same period last year. Total customers as at October 31, 2008 were 24,430, an increase of 4 per cent over last year. Total operating expenses increased 52 per cent to $57 million and were primarily driven by higher power generation expenses, including fuel costs.

As the price of fuel decreases on the world markets, CUC said this week that its customer’s bills in Grand Cayman are now coming down. The Fuel factor for November is 22 cents falling from an all time high of 27 in September and while the fuel factor is still higher than the start of the year’s rate of 18 cents, the firm said it should fall to 17 cents next month.

The cost of diesel fuel used in the generation of electricity is passed on to consumers as a separate line item on their monthly electricity bills, without mark up CUC said but that customers can see the exact cost of fuel used to generate the electricity they used under the line entitled “Fuel Charge”, which is comprised of the fuel factor multiplied by the number of kilowatt hours they consumed during the billing period.

The fuel factor is the per kilowatt hour charge for fuel which over the past few months has been as follows: January 0.18; February 0.18; March $0.18; April 0.19; May0.21; June 0.22; July 0.22; August 0.26; September 0.27; October 0.25 and November 0.22/

“We expect the December fuel factor to be in the range of CI$0.17 reflecting the dramatic drop in fossil fuel and refined product costs,” said President and CEO of Caribbean Utilities Company, Ltd,  Richard Hew.  “I am pleased to see that the cost of fuel has been coming down and customers are seeing lower bills.  CUC uses its volume fuel purchasing power under long term contracts to minimize fuel costs and passes these costs directly through to customers. None-the-less, fuel costs are subject market fluctuations driven by worldwide supply and demand. ”

He encouraged customers to still minimize their consumption by following conservation practices outlined in the Energy Smart section of CUC’s website.  In particular, consumers purchasing appliances can help reduce consumption by understanding appliance energy ratings and choosing high efficiency units.

Meanwhile, according to the second quarter results for 2008 the firm said earnings on Class A Ordinary Shares were $5.3 million or $0.18 per share down in comparison compared to the $6.1 million or $0.24 per share for the second quarter of fiscal 2008.

“We continued to experience growth in demand for electricity in the second quarter of fiscal 2009 as ongoing commercial and residential construction projects came online,” Hew said. “Electricity sales Electricity sales were up 4 per cent over the second quarter of fiscal 2008 despite above average rainfall and below average temperatures during the month of October. A new peak load high of 93.7 MW was achieved in August.” He added that the Company continues to monitor the weakening global economic indicators and to assess the potential impact on the growth of electricity sales in Grand Cayman.

The firm said that the 30 percent decline in earnings per share for the six month period was due principally to the removal of the Hurricane Ivan Cost Recovery Surcharge and a

3.25 per cent rate reduction, both in January of 2008, partially offset by 4 per cent KiloWatt-hour (“kWh”) sales growth.

Operating revenues for the second quarter were $63.2 million, a 32% increase over $44.6 million for the same period last year. This $17.6 million increase was driven principally by a 54 per cent increase in fuel factor revenues, which were offset by higher fuel expenses. Total electricity sales for the quarter increased 4 per cent to 145.8 million kWh from 139.7 million kWh for the same period last year. Total customers as at October 31, 2008 were 24,430, an increase of 4 per cent over last year. Total operating expenses increased 52 per cent to $57 million and were primarily driven by higher power generation expenses, including fuel costs.

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