Some of the linecrew get ready to connect customers.

Control Operators Marlon Smith and Clayton Powell reviews the list of customer calls to the Outage Reporting Hotline.

Letitia Lawrence and Richard Solomon discuss an upgrade to the software currently being utilised by the Financial Service Department.

Geva Powell explains the process for connecting security lights at the soon-to-be opened Speedway in Breakers with customer Robert Campbell.

Richard Hew confers with Dana Smith on the number of customers who have not yet requested reconnection following the Hurricane.

Dario Mayorquin and Kevin Winton conduct repairs to one of the Company's generating units.

As well as being a silent partner behind the economic fortunes of the Cayman Islands for the past 40 years, Caribbean Utilities Company (CUC), has also made an impressive contribution to the environment and our community, which is a rare thing indeed for a publicly traded monopoly supplier of electricity.

Through its Energy Smart programme, which has been running for more than ten years now, CUC has become known as a company that cares about its consumers. But it doesn’t just produce a list of tips for customers with advice on how they can save money on their bills by conserving energy.

CUC provides ‘walk-through audits’, actually going to people’s homes and businesses identifying instances where energy is being wasted and where savings can be achieved. And while this activity might well reduce top line revenues for the company, it has obvious benefits for the environment and is evident of the entire culture at CUC, which has not been an overnight story.

“We launched our Power Smart programme in 1992,” said Richard Hew, president and CEO of CUC. “It was a response to the fuel price increases following the first Gulf War which, combined with the increase in the use of air-conditioners, was driving consumers’ bills up.”

The programme continues today, although renamed Energy Smart. Other actions, which have earned CUC this recognition as a good corporate citizen on the environmental front are its adoption of high grade diesel fuel with a low sulphur content, a policy that has been in place for over 15 years.

Emissions from burning fuel cannot be avoided when creating energy, but cleaner fuel certainly results in lower emissions and the company strives to minimise the impact of its generation activity on the atmosphere. It is also worth noting how carefully fuel oil and lubricants are handled on site, with proper procedures in place to contain any spills and to prevent oil seeping into the ground.

Pipes and tanks are double-walled and a significant investment has been made in creating containment areas around the tanks. The most recent initiative is a comprehensive Environmental Management System, which is certified by the International Organization for Standards, with the classification of ISO 14001.

This means a formal system is in place to ensure continuous improvement of environmental standards, with specific measurable targets where improvements can be measured for things like the number of spills or the amount of emissions. “We also look at our impact on the landfill,” Mr Hew says, with large scale recycling taking place and lubricant oil shipped overseas for disposal.

Some 380 used transformers, which were damaged by Ivan have been shipped abroad and recycled, which have more than paid for themselves in terms of the scrap metal prices received. CUC also has a major stake in reducing its reliance on diesel to create electricity, particularly with the current high fuel prices.

“Although diesel is still the most practical and feasible energy source for Grand Cayman, some alternatives are coming into play,” Mr Hew says. Wind turbines may be feasible at current fuel prices and there is promise in the area of Ocean Thermal Energy Conversion (OTEC), which captures the difference between surface water temperature of around 80 degrees Fahrenheit and the 50 degrees temperature 3,000 feet below, to drive a thermal cycle.

Mr Hew said that OTEC electricity could well be in production over the next two to three years and CUC has a memorandum of understanding in place with the Baltimore-based company Sea Solar International, should the technology prove viable.

“I think we’ve demonstrated that we take our responsibility to the environment seriously in everything we’ve done, by being proactive in the absence of environmental legislation,” he added. Aside from the environment, CUC’s key priorities for the moment are maintaining its reliability and quality of service, which Hew feels is unmatched in the region, in terms of the competitive rates it delivers at for similar sized islands with similar quantities of natural resources.

Data is recorded and benchmarked on every customer outage and CUC expects to be operating at full generation capacity by April, in advance of the summer peak. “We are still working out some of the lingering effects of Ivan, so there have been a few more intermittent outages,” Mr Hew said.

The company has an active community involvement programme, both through volunteer work and financial projects. It founded an annual summer vocational programme for John Gray High School in 1999 and sponsors the primary school football league.

Among other initiatives, they have sponsored various after school programmes and summer camps for school children, as well as work to improve the beaches and replant trees on the island. Indeed, CUC’s contribution in the area of assistance to community programmes is so significant; it would require several articles to do it justice. The utility’s growth has tracked that of the Cayman Islands.

As the economy expands the company has met this growth with investment in the infrastructure, and is now widely recognised as the most reliable utility in the Caribbean. It is an extraordinary achievement for the forty year old institution, which has quietly been powering Cayman’s economic success.

“Over the past 40-years, the company and the country have changed significantly and it has been a challenge to keep up with that growth and improve reliability,” Mr Hew states. “We believe our partnerships with the various administrations over the years have been successful in the development of the economy. The Cayman Islands is a success story and we are proud to be a part of that.”

The company is also a significant employer in the local economy, with over 90% of its staff being Caymanian. This is at all levels of the firm, from the front line to executive positions, Mr Hew explained, which was a strategy of the CUC board many years ago.

As well as investing in scholarships, training and development, CUC gives its employees the opportunity to advance by placing them in challenging roles. There have been a number of very significant moments in the company’s 40-year history, which will be remembered by many of its employees past and present who have contributed to the success of the company over the years.

More recent historical highpoints include CUC’s listing on the Toronto Stock Exchange in September 1990 when it became a public company after an Initial Private Offering. “Huge amounts of capital were required at that time and the investment in the infrastructure would not have been possible otherwise,” Mr Hew said. “Although our shares are publicly traded and available to all, we are quite proud to have more than 1,200 local shareholders.”

This is no doubt helped by CUC’s Customer Share Purchase Programme, which allows anyone to purchase shares in the company with a minimum investment of just $25, up to $12,000 per year. The key benefit of this programme is that it allows local people to have a stake in their electricity company without having to pay transaction charges.

“The listing was a real watershed for us and the Cayman Islands,” Mr Hew said. “We are still one of the few companies here to list on an international stock exchange. The challenge of restoring power throughout the island after Hurricane Ivan was particularly significant and it was important that it was done quickly, in order to help residents rebuild.

CUC helped get the other essential services, such as water, hospitals, the airport and the financial centre back in service within a week. The initial estimate for getting the rest of the island’s network running again was 90 days and it was achieved in 77 days, with full power back on November 30 2004.

The lessons learned by the less severe Hurricane Gilbert in 1988 helped because everything built since then remained intact, but some older power houses were subject to flooding, while two generators were written off and four were repaired. Generation wasn’t an issue after Ivan, but transmission and distribution was a problem.

Should the worst happen again, CUC has a standby agreement with a shipping charter company to get materials onto the island quickly, as this, as well as a major equipment shortage, was a big difficulty after Ivan, due to the other hurricanes that had already hit the region.

The business of supplying electricity is often compared to other utilities such as the telecommunications industry and the two historical monopolies have often been judged by similar standards, but there are some important differences to consider.

The two technologies are quite diverse to begin with, as telecommunications is now wireless, unlike the poles and wires required to carry electricity, which also has a much higher energy requirement. The scale of capital needed is also vastly different. In order to keep up with growth and maintain reliability CUC’s capital expenditures have totalled over US$150m for the past five years.

“Greater economies of scale can be attained with size, so the bigger we are, the lower the cost per kiloWatt-hour,” Mr Hew says. “For this reason you will not find full competition in systems below 1,000 MW in demand. Consumers in deregulated electricity markets have also found reliability to be an issue and more importantly, harder to find someone to contact when they do have a problem, in what has become a fragmented supply chain.

Mr Hew says CUC takes full responsibility from start to finish for its product and with the company’s distinguished history, strong community involvement and environmental stance, that responsibility is clearly taken very seriously.