Business
Government and CUC announce the signing of electricity licences
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 CARIBBEAN\n\n\nUTILITIES 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\nGRAND CAYMAN, Cayman Islands, April 3 /CNW/ - The Cayman Islands\nGovernment ("Government") and Caribbean Utilities Company, Ltd. ("CUC")\nannounced today, the signing of an exclusive Electricity Transmission and\nDistribution Licence (the "T&D Licence") and a non-exclusive Electricity\nGeneration Licence (the "Generation Licence") for operations in Grand Cayman.\nThe terms of the licences were outlined in an Agreement in Principle ("AIP")\ndated and announced December 20, 2007 and remain substantially the same.\n\n\nThe non-exclusive Generation Licence is for a term of 21.5 years. The\nrecently amended Electricity Regulatory Authority Law (2005 Revision) provides\nfor the conduct of a competitive bid process to be managed by the Electricity\nRegulatory Authority ("ERA") for new generating capacity and for the\nreplacement of retired generating capacity. The first such competitive process\nunder this licence is expected to begin later this year with the filing of the\nCertificate of Need by CUC for the calendar years 2011 and 2012.\n\n\nThe exclusive T&D Licence is for an initial term of 20 years with a\nprovision for automatic renewal unless either party gives notice to terminate.\n\n\nThe December 20, 2007 AIP announcement outlined the Rate Cap Adjustment\nMechanism ("RCAM") which is designed to maintain the CUC Return On Rate Base\n("RORB") in the target 9 to 11% range. Under the RCAM, base rate adjustments\nwill be considered annually based on a combination of Cayman Islands and US\nconsumer price index ("CPI") movements defined as the Price Level Index. As a\nrefinement to the previously announced RCAM, the parties have further agreed\nthat, in the year following a natural disaster such as a hurricane where the\nGovernor has declared a state of emergency and the Cayman Islands CPI doubles,\nCUC's base rate adjustments will be limited to 60% of the Price Level Index.\nAny residual base rate adjustment for that year that would otherwi...