With the outcry recently at the rise in CUC’s May electricity bills here despite the world price in fuel showing record drops from last February, we got an explanation that CUC had bought the fuel before it dropped when it was at its highest.

Oh dear. How lucky for them.

Now, presumably because of the widespread anger, they have sent out a letter to their customers (see below) headed “Lower Fuel Rates on CUC Customer Bills” giving them the good news their “June bill (May’s consumption) the fuel cost per kilowatt-hour (kWh) consumed will be 5.5% lower than it was on May’s bills”.

There is even more good news.:

“For the average residential customer this will result in a decrease of approximately 3.2% on the overall June bill if your energy consumption remains the same as the prior month. Small commercial customers will also see a decrease on average of 2.9%. Large commercial customers will a see a decrease on average of 3.1%.

“Preliminary indications are that there will be a further reduction of 20% in the fuel cost rate on the July bills.”

Isn’t that great?

Not really their letter is tempered with warnings:

“However, potential savings from this reduction in the fuel price may be impacted by individuals spending 8 to 10 more hours at home per workday and by the increasing temperatures as we approach the summer months.”

This is followed by a long paragraph of gobble-de-gook that includes an encouragement from them not for you to use more electricity to make them and their shareholders richer, but for their customers “to conserve energy as much as you can in the warmer months ahead so that you may harvest the benefits of the fuel cost decline.”

I still haven’t stopped laughing.

This is further exacerbated by informing us that our local Utility Regulation and Competition Office (OfReg) review their calculation of the per kWh rate used to recover those fuel costs.

As an elderly lady once said to me, “I almost wet my pants”.

If that isn’t enough of a warning that you might actually not much of lower bill cost next month we have an even longer concluding paragraph informing that there might still be some high price fuel still left in the Jackson Point Fuel Terminal “that was purchased by the fuel companies as far back as January; depending on where Grand Cayman is on the shipping routes and the time it takes inventory from that shipment to be used by CUC.”

In fact “here may be a significant lag in time for the world market price of fuel to be passed through on electricity bills.“

Amazingly, it seems to be much quicker to get passed through when the market price of fuel rises. Or is that my imagination?

The CUC letter does end on a high note that should make you feel a lot better until you receive your next bill from them:

“The good news is that the significant drop in market prices that occurred in March has been sustained until present so we can look forward to lower fuel factor through the summer starting in June.”

Thank you CUC. It has to be a joke. Isn’t it?

Letter from CUC

Lower Fuel Rates on CUC Customer Bills

Dear Valued Customer,

We at CUC hope that you and your family are safe and well. When you receive your June bill (May’s consumption) the fuel cost per kilowatt-hour (kWh) consumed will be 5.5% lower than it was on May’s bills.

For the average residential customer this will result in a decrease of approximately 3.2% on the overall June bill if your energy consumption remains the same as the prior month. Small commercial customers will also see a decrease on average of 2.9%. Large commercial customers will a see a decrease on average of 3.1%.

Preliminary indications are that there will be a further reduction of 20% in the fuel cost rate on the July bills.

However, potential savings from this reduction in the fuel price may be impacted by individuals spending 8 to 10 more hours at home per workday and by the increasing temperatures as we approach the summer months.

During the summer months, air conditioners have to work harder to keep your homes cool. A one-degree temperature rise outdoors has almost the same effect on your energy usage as decreasing your thermostat set point by one degree.

We therefore encourage you to conserve energy as much as you can in the warmer months ahead so that you may harvest the benefits of the fuel cost decline.

On a monthly basis, CUC submits information regarding its fuel costs and its calculation of the per kWh rate used to recover those fuel costs to the Utility Regulation and Competition Office (OfReg) to be reviewed in advance of billing customers. The fuel costs are recovered from electricity consumers more than two months in arrears in order to allow for a thorough review process by OfReg. For example, costs related to fuel pumped to CUC and invoiced by the fuel companies in March are sent to OfReg in April for approval to be included in the consumer charges for electricity consumed in May, which is billed in early June.

Please also be aware that the fuel pumped to CUC from the storage tanks at the Jackson Point Fuel Terminal in March might include inventory that was purchased by the fuel companies as far back as January; depending on where Grand Cayman is on the shipping routes and the time it takes inventory from that shipment to be used by CUC. The base price of the fuel is set by the market price at the time the ship is loaded in the Gulf Coast of the United States. Shipping and handling costs and import duty are also added at that time. For these reasons, there may be a significant lag in time for the world market price of fuel to be passed through on electricity bills. The good news is that the significant drop in market prices that occurred in March has been sustained until present so we can look forward to lower fuel factor through the summer starting in June.