Business
Caribbean Utilities Company, Ltd. - Government And CUC Reach Agreement
JOINT MEDIA RELEASE BY THE GOVERNMENT OF THE CAYMAN ISLANDS AND CARIBBEAN UTILITIES COMPANY, LTD ...
About this update from Caribbean Utilities Co. Ltd. Class A
[{"type":"text","content":"\n\n\n\nJOINT MEDIA RELEASE BY THE GOVERNMENT OF THE CAYMAN ISLANDS AND\n\n\nCARIBBEAN UTILITIES COMPANY, LTD (CUC)\n\n\nTHE CLASS A ORDINARY SHARES OF CARIBBEAN UTILITIES COMPANY, LTD. ARE\n\n\nLISTED FOR TRADING IN UNITED STATES FUNDS ON THE TORONTO STOCK\n\n\nEXCHANGE/TRADING SYMBOL: CUP.U\n\n\n-------------------------------------------------------------------------\n\n\nGRAND CAYMAN, Cayman Islands, Dec. 20 /CNW/ - The Cayman Islands\nGovernment (Government) and Caribbean Utilities Company, Ltd. (CUC) have\nreached Agreement in Principle (AIP) on the terms of new 20 year licences for\nCUC covering the generation, transmission and distribution of electricity in\nGrand Cayman. The terms include competition for future generating capacity and\ngeneral promotion of the use of renewable sources of energy.\n\n\nThe agreement will also result in savings to the average residential\nconsumer in excess of 15%. Consumer savings will arise from average reductions\nof 3.25% of base rates, removal of the Hurricane Ivan Cost Recovery Surcharge\n(CRS) which will reduce bills by 4.7% and the implementation of a Government\nrebate of CI$0.20 per Imperial Gallon of fuel used in generation to be applied\nto the first 1,500 kiloWatt-hours (kWh) of monthly residential consumption. It\nis contemplated that the January 2008 billings will reflect all these changes.\nThese reductions and the agreement as a whole will support continued economic\ngrowth on Grand Cayman.\n\n\nThe parties have today signed an AIP which, while not legally binding,\nreflects the framework to which the parties have agreed. The AIP will form the\nbasis of the licensing documents that are expected to be signed by February\n2008, and defines the process through which CUC will surrender its current\nlicence in exchange for the new licences.\n\n\nThe agreement will see the replacement of the current permitted 15%\nrate-of-return-on-rate base (RORB) formula with a rate cap and adjustment\nmechanism (RCAM) based on published consumer price indices. CUC's RORB will\nnow be targeted in the 9-11% range. This mechanism will ensure rate\npredictability and provide further incentives for CUC to operate efficiently\nand keep its cost increases below inflation.\n\n\nHighlights of the agreement include:\n\n\nElectricity Regulatory Authority\n\n\nThe Electricity Regulatory Authority (ERA) w...