Water customers in Cayman can expect the cost of water per gallon to fall by about 6.5% under a new 25-year licence for Cayman Water Company.
The Utility Regulation and Competition Office (URCO) announced the licence on 18 Aug. It took effect on 1 Aug. and brings an end to a renewal process that had remained unresolved for more than 18 years under successive administrations.
The reduction comes from lower base water rates and energy cost recovery charges included in the new licence.
URCO said the 6.5% figure compares the average cost of water per gallon under the new licence with the average cost under the previous licence.
The licence sets the regulatory terms for Cayman Water and retains an annual mechanism for adjusting base water rates.
URCO Chief Executive Officer Sonji Myles said the agreement provides a framework for the future of regulated water services.
“It demonstrates that focus, constructive engagement between a regulator and a utility can deliver a framework that protects consumers, supports regulatory certainty and enables the utility to plan responsibly for the long term,” Myles said.
J. Samuel Jackson, chairman of URCO’s board, said the licence reflects the office’s focus on resolving regulatory matters that have remained outstanding.
“After more than 18 years without a resolution, this licence reflects the current Office’s focus on converting long-outstanding regulatory matters into tangible results for the people we serve,” Jackson said.
Cayman Water Chairman and Chief Executive Officer Rick McTaggart said the licence gives the company certainty over the next 25 years while lowering costs for customers.
McTaggart also said the annual base water rate adjustment mechanism from the previous licence has been retained.
The licence is intended to balance the cost of water for customers with the investment certainty needed to maintain safe, reliable and sustainable water services, according to URCO.
The new terms follow more than 18 years of negotiations between the regulator and Cayman Water. The company has provided retail water service in Grand Cayman since 1973.
