Cayman Water Company has secured a new 25-year utility licence after more than 18 years of regulatory uncertainty, under a deal expected to cut the average cost of water per gallon by about 6.5%.

The Utility Regulation and Competition Office, known as URCO, said the licence took effect on 1 August and introduces lower base water rates and energy cost recovery charges.

The 6.5% figure does not mean every customer will see their total water bill fall by that amount. It applies to the average cost per gallon compared with the previous licence, while the effect on individual bills will depend on consumption and the charges that apply.

The agreement settles a licence-renewal process that had remained unresolved for more than 18 years and gives Cayman Water Company a regulatory framework for the next quarter-century.

It does not, however, lock today's base water rates in place for 25 years.

The licence retains an annual base water-rate adjustment mechanism, meaning the base rate can change during the term of the agreement under the process set out in the licence.

18-Year Wait Comes To An End

The length of the renewal process is one of the most significant aspects of the agreement.

URCO said sustained engagement between the regulator and Cayman Water Company led to the new framework, although its announcement did not give a detailed account of why the renewal remained unresolved for more than 18 years or what ultimately allowed the parties to reach an agreement.

Sonji Myles, chief executive of URCO, said: "Securing this new licence after so many years is an important outcome for customers and for the future of properly regulated water service in the Cayman Islands."

The deal gives Cayman Water Company greater certainty over the regulatory framework under which it will operate and plan for the longer term.

Rick McTaggart, Cayman Water Company's chairman and chief executive, said: "Our new water utility licence is a win for our customers and the company."

McTaggart said the lower base water rates and energy cost recovery charges were expected to reduce the average cost of water per gallon by about 6.5% compared with the previous licence.

What The New Licence Means For Customers

The immediate change for customers comes through the lower base water rates and energy cost recovery charges established under the licence.

How much an individual household will save is less clear. The 6.5% figure refers to the average cost of water per gallon and does not mean every customer's total bill will fall by the same percentage.

Actual savings will depend on water consumption and the charges applied under the new framework.

The annual base water-rate adjustment mechanism will also matter over the longer term. Although the new licence starts with lower rates and charges, the base rate will not remain fixed for its full 25-year term.

Instead, the licence provides a formal process for annual adjustments. Future costs will therefore depend in part on how that mechanism operates and the adjustments made over the life of the agreement.

Water Costs Have Faced Political Scrutiny

The reduction comes shortly after water prices became a political issue elsewhere in the Cayman Islands.

The Water Authority announced a 3% rate increase on 3 June 2026, with the new rates taking effect on 1 July.

Later that month, Deputy Opposition Leader Kenneth Bryan criticised the increase in Parliament, saying:

"For months, we begged the NCFC government, on behalf of the people, to halt this intended price increase - yet the cries have been completely ignored."

The Water Authority increase is separate from Cayman Water Company's new licence. The two are different water providers, and the changes were made under separate arrangements.

The contrasting moves nevertheless put the cost of water into sharper focus. While Water Authority customers faced a 3% rate increase from July, Cayman Water Company's new licence is expected to reduce its average cost of water per gallon by about 6.5%.

For Cayman Water Company customers, the longer-term picture will depend partly on how the annual base water-rate adjustment mechanism is applied.

The agreement also ends an unusually long-running regulatory process and provides Cayman Water Company with a settled licence for the next 25 years.