Consumer protection coming for Sister Islands energy users

The Utility Regulation and Competition Office (URCO) has recently published proposed amendments of Island Energy Limited’s (IEL) Transmission and Distribution (T&D) Licence. The consultation period opened on 2 February 2026 and will close at 5:00pm on 16 February 2026. The proposed amendments have been published to allow IEL (which used to be known as Cayman Brac Power and Light) and anyone else interested to comment on proposed licence amendments.

The proposed amendments are intended to strengthen consumer protection in electricity services for Cayman Brac and Little Cayman, establishing clear rules governing how electricity charges are set and adjusted, providing consumers with greater transparency and predictability while ensuring the licensee can maintain reliable service delivery and improve efficiencies in energy production.

It is also intended that the amendments will allow IEL to move forward with planned investments in renewable energy infrastructure. By establishing a transparent and sustainable rate-setting mechanism, URCO aims to facilitate the transition toward cleaner energy sources while protecting consumers from unpredictable price fluctuations.

Included are provisions relating to the Rate Cap and Adjustment Mechanism (RCAM). The proposed RCAM would take effect from 1 January 2026, with annual rate adjustments requiring URCO approval where necessary and linked to inflation and productivity factors, while incorporating safeguards based on the licensee’s allowed return on rate base.

Base rates would be clearly defined and restructured to exclude fuel costs and government or regulatory charges, improving transparency for consumers. Customers will be able to see exactly what portion of their bill reflects the cost of electricity delivery versus pass-through costs beyond the utility’s control.

Fuel costs and government and regulatory costs would be shown as separate line items on customer bills, supported by tracker accounts to ensure these costs are passed through without financial gain by the licensee. This transparency measure protects consumers by ensuring they only pay actual costs without hidden markups.

Enhanced reporting obligations are proposed, including quarterly operational reporting and cost-of-service studies, alongside a five-year review of RCAM and rate design. These measures strengthen URCO’s ability to monitor the utility’s performance and protect consumer interests through evidence-based regulation.

URCO said it considers consultation to be a fundamental element of regulatory accountability and procedural fairness. Consumer input is particularly important in ensuring that the proposed framework adequately protects residential and business customers while supporting the investment needed for reliable and sustainable electricity services.

Stakeholders are invited to comment on the draft amendments and supporting documents are available on URCO’s website at https://www.ofreg.ky/consultations . All submissions must be made in writing and received by 5:00pm on 16 February 2026. Submissions may be sent by:

Email: consultations@ofreg.ky  

Post: Utility Regulation and Competition Office, P.O. Box 10189, Grand Cayman KY1-1002

Courier: Utility Regulation and Competition Office, 3rd Floor, Monaco Towers II, 11 Dr. Roy’s Drive, Grand Cayman PO Box 10189 Grand Cayman KY1-1002 Cayman Islands

Parties submitting confidential information are required to also provide a redacted version for the public record, together with reasons for confidentiality, in accordance with section 107 of the Utility Regulation and Competition Act. Requests for extensions must be submitted no less than four days before the consultation deadline and must include a full justification. Following consideration of submissions received, URCO will issue a Final Determination. If adopted, the amended T&D Licence will take effect upon approval by URCO’s Board of Directors.