The impact of COVID-19 on the economy and society is reflected in the latest quarterly report by electricity provider Caribbean Utilities Company (CUC).
However, the company says although its sales for the nine months from January to September were negatively impacted by a reduction in power usage by large commercial customers, that was partially offset by an increase in demand by residential customer compared to 2019.
At the same time CUC says it has experienced an increase in accounts receivable during the period and as a result has increased the amount recorded for expected credit losses.
It also disclosed that it has proposed to defer the required base rate increase until January 1, 2021.
CUC which supplies Grand Cayman has a customer base of 30,895 residential and business, an increase of 641 customers, or 2%, compared to 30,254 customers as at September last year.
The utility provider also reports that earnings for the Third Quarter (Q3) this year totalled US$10.4 million, the same amount that it earned for Q3 in 2019.
Overall for the period between January and September this year compared to last year, CUC’s net earnings totalled US$18.7 million down by US$4.2 million compared to US$22.9 million in 2019.
The company attributes this decrease primarily to higher depreciation and finance charges.
Electricity sales for the three months July to September this year was 175.1 million kilowatt hours (“kWh”), a decrease of 9.3 million kWh, or 5%, compared to the 184.4 million kWh it sold for the corresponding period in 2019.
Looking at the nine months between from January to the end of September this year, CUC reports that in all it sold 492.9 million kWh, a decrease of 11.0 million kWh, or 2%, compared to 503.9 million kWh compared to the same time frame in last year.
It also points out that cross the nine months ending in September this year it experienced a 24% decline in average fuel costs when compared to the same period in 2019.
CUC says the savings have resulted in the average rate decreasing over that period to 27 cents per kWh in comparison to 30 cents last year.
This it says means that “customers have paid less per kWh for electricity consumed during the nine months ended September 30, 2020 in comparison to the nine months ended September 30, 2019.”
President and CEO, Richard Hew, says, “Although the duration and final impact of the COVID-19 pandemic on the Cayman Islands’ economy and CUC remain uncertain, Q3 2020 represented a relatively stable quarter for the Company in the circumstances.”
The CUC boss also said during the quarter, “the Company continued to deliver on its objectives of health and safety of its employees and the public, reliable electricity service, financial stability and being a good corporate citizen.”
Health and safety and reliability performance indicators were as planned, Mr Hew added, and the Company was pleased to reach agreement with its regulator to defer the impact of the rate adjustments on customer bills until 2021.
During the quarter under review, CUC also submitted a utility-scale solar project to the regulator which is permitted under its license and which it said is in keeping with company’s and the Cayman Islands’ renewable energy goals.”
In its Q3 report, CUS notes that at this point, the extent to which COVID-19 may impact its financial condition or results of operations remains uncertain and will depend on certain developments, including the duration and spread of the outbreak, curfew restrictions, impact on customers, employees, and vendors all of which cannot be predicted.
CUC says it continues to monitor the rapidly evolving situation and guidance from the Cayman Islands Government and local public health authorities" and that it may take additional actions based on their recommendations.
The Company has also applied for recovery of various COVID-19 related expenses, including potential credit losses resulting from suspension of disconnections during the pandemic.
The statement said, if approved, these amounts would be recorded as regulatory assets and recovered through future rates.
The response from the regulator OfReg to the proposed COVID-19 cost recovery is expected during the Fourth Quarter 2020.