Another cold wet spell sees CUC sales fall

| 15/11/2010

(CNS): Cayman’s power provider Caribbean Utilities Company Ltd has announced a fall in sales in its unaudited results for the third quarter ended 30 September. The local electricity firm said sales were impacted by cooler and wetter weather compared to the same period in 2009. Electricity sales for the third quarter of 2010 totalled 152.7 million kilowatt hours compared to 153.3 million kWh for the same period in 209. CUC said that so far this year it has added 507 customers and 151 of those signed up for power in the third quarter. CUC currently has 25,968 customers 2% up on 2009.

President and CEO of CUC Richard Hew said the firm was focused on trimming capital and other expenditures to preserve cash while meeting its obligations to serve reliably.
“As expected we are seeing very weak underlying growth in sales through the first three quarters of 2010 and this weakness is expected to continue through 201,” he said. We expect the lower growth on the island to last through 2011 and see few major construction projects scheduled to come on line which would increase demand.”

The results revealed that electricity sales revenue for the third quarter of 2010 was down slightly at $19.1 million from $19.2 million for the same period in 2009 but electricity sales were up $1.8 million or 4% for the nine months ended September 30, 2010 to $53.4 million compared to $51.6 million for the nine months ended September 30, 2009 mainly due to weather influences.

Net earnings for the third quarter of this year were down marginally from net earnings for the three months last year at 6.6 million, while earnings for the year so far are still up on 2009 by 8% because of higher temperatures during the first half of 2010.

Higher depreciation and financing costs in 2010 offset lower maintenance, general and administration and distribution expenses. After the adjustment for dividends on the Class B Preference Shares of the Company, earnings on Class A Ordinary Shares for the third quarter of 2010 were $6.5 million, or $0.23 per Class A Ordinary Share, as compared to $6.1 million, or $0.21 per Class A Ordinary Share for the three months ended September 2009, the firm said.

After the adjustment for dividends on Class B Preference Shares, earnings on Class A Ordinary Shares for the nine months ended September 30, 2010 were up $1.6 million or 12% to $14.9 million, or $0.52 per Class A Ordinary Share, as compared to $13.3 million, or $0.47 per Class A
Ordinary Share for the nine months ended September 30, 2009.

In the firm’s message to shareholders management said it was disappointed that plans for a had 10 MW wind generating projected had been curtailed because government’s plans to install a Doppler radar facility in the same place but the firm remain committed to further development of alternative energy sources.

See Third Quarter Report

 

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  1. Fiddler on the Roof says:

    I was bored, so I checked.

    Here are the facts relating to my CUC bills using approximate figures.

    July 2009 – $250  July 2010 – $425

    August 2009 – $285  August 2010 – $425

    September 2009 – $300   September 2010 – $360

    I’m beginning to realise that my cash flow problems are not in fact related to the "global economic slowdown" after all.

    I’m also coming to realise that this report from CUC is not entirely truthful.

    The difference of course lies in the fuel costs.

     

  2. Anonymous says:

    Who is the idiot in our goverment who is allowing CUC to weasle out of a committment to install 10 MW of wind generating power that will save the country and the consumers millions on dollars in foreign exchange into the future and install in it’s place a doppler rader station that going to cost us millions of dollars into the future?

    Stupid move well done.

  3. Anonymous says:

    I dont know what they complaining about as they makes so much money off all of us already.

  4. A Concerned Young Caymanian Father says:

    Hallelujah!!! Hopefully, this will continue and they’ll lower their prices AND GET RID OF THE UNNECESSARY FUEL ADJUSTMENT FEE!! You operate in a  country, take SOME of the cost associated with doing business rather than have the consumer bear all the costs!

  5. Libertarian says:

    For your Information:

    WIKIPEDIA (Internet Encyclopedia) states – "A Doppler radar is a specialized radar that makes use of the doppler effect to produce velocity data about objects at a distance. It does this by beaming a microwave signal towards a desired target and listening for its reflection, then analyzing how the frequency of the returned signal has been altered by the object’s motion. This variation gives direct and highly accurate measurements of the radial component of a target’s velocity relative to the radar. Doppler radars are used in aviation, sounding satellites, police speed guns[1], and radiology."

    One must wonder why is Government preventing a monopoly, namely, CUC from introduction something new that would lower energy cost?

    Just curious

    • Anonymous says:

      Cayman is small and flat. I doubt very much that there is only one location to test wind power, whereas we have to give government the benefit of the doubt since the radar has to be installed on government owned property.

      It is up to CUC to prove that this is not a tactic to delay the implementation of renewable energy.

      • Anonymous says:

        Of course its a tactic to delay the implementation of renewable energy. We all know how they operate….the "Hurricane Ivan recovery" charge that was on our bills for what…3 or 4 YEARS! Nobody realizes the figures they were generating by charging us this…at 25,000 houses they were making roughly $9,000,000.00 a year from this charge alone! The quicker somebosy comes in and knocks them on their high horse the better!

        • Anonymous says:

           

          "the "Hurricane Ivan recovery" charge that was on our bills for what…3 or 4 YEARS! Nobody realizes the figures they were generating by charging us this…at 25,000 houses they were making roughly $9,000,000.00 a year from this charge alone!".
          I have no brief for CUC, but in the interest of factual information I thought I should make the following points. The agreement between CIG and CUC was to collect US$13.4 million in the form of a three–year 4.7 per cent cost recovery surcharge that was added to electricity bills. As part of the negotiations for the new licences it was agreed that CUC would not collect the remaining $2.2m and therefore collected a total of $11.2m.  
          In theory there are three basic options:
          1. Full insurance coverage.
          2. An up–front fee to customers to set aside for the disaster contingency.
          3. Collect fees after the fact though a cost recovery surcharge.
           
          In the first instance we have been told by CUC that following Hurricane Andrew in 1992 the insurance providers had decided T&D insurance was way too much exposure and they were not going to carry it. At various times since some insurers have offered it but at extremely high premiums – some 12% of the insured value per annum. Obviously this would have represented a substantial cost to CUC, lowered its return and entitled it to larger rate increases to meet its then guaranteed 15% rate of return.  The customers would have paid for this over decades whether or not there was any hurricane damage. It would have taken just over 9 years for the customers to have prepaid the cost to replace the entire T&D System. In addition, there would still have been a deductible to pay. 
            
          Similarly, requiring customers to prepay into a special fund which or may not be required to be used would not have assisted the customer.
           
          It should be obvious that under all three scenarios the customer pays either up front or after the event. This is no different from any other business. If the proprietor of the supermarket suffers losses as a result of a hurricane he adds this cost into the price of the groceries. If he pays insurance premiums this is added into the price. The only difference is that it is not transparent to the customer.  

          Perhaps I am naïve in hoping this will put this issue to rest.