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.