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More Power to be Generated

The Cayman Islands’ Electricity Regulatory Authority (ERA) will soon wrap up the bidding process to select a solution to Grand Cayman’s need for new firm generating capacity.

ERA Managing Director Charles Farrington says the final choice will be announced at month-end. This will be followed by the successful bidder’s preparations for the additional generation – which must be online by 2016.

The process began in 2012 with a Request for Proposals (RFP) that was based on a Certificate of Need issued by Caribbean Utilities Company (CUC), which outlined the need for increased power generation.

Once the ERA determined that increased capacity was indeed required, it proceeded with a RFP to replace the soon-to-be-retired CUC generators, and also provide capacity for expected growth.

The RFP stipulated that the bid with the highest total score would be judged the winner. It also explained that the bid with the lowest cost per kilowatt-hour would win the “price” aspect of the competition, with 80 points.

In addition, each bid could receive a maximum of 20 points based on other attributes set out in the RFP. These included environmental impact, fuel- and equipment-supply plans, financing, profitability, construction and operating plans – as well as other parameters.

The 36 megawatts of supplemental power, along with CUC’s existing capacity after current and upcoming retirements, will meet the forecast energy demand for the next several years.

In July 2013 the initial solicitation process was postponed due to delays following allegations of corruption made by the ERA’s ex-Managing Director. Since then, the Cayman Islands Anti-Corruption Commission (ACC) concluded its investigation into the allegations, and in May 2014 determined that they were unfounded.

A new RFP was subsequently issued to five pre-qualified bidders, as well as CUC – which, under the terms of its licence, was obligated to bid. Competition for new power generation on Grand Cayman is one of the core principles of the new CUC licence, renewed in 2008, although CUC remains the exclusive transmission and distribution licensee on Grand Cayman.

In May, the ERA received proposals from three qualified bidders – CUC, Dart Enterprises Real Estate Ltd. and the Louis Berger Group. Between them, the bidders submitted six proposed firm power alternatives involving four different fossil fuels: liquefied propane gas, compressed natural gas, diesel oil and heavy fuel oil.

At that time the ERA expressed its approval of the diversity of fuel options in the bidders' proposals, and the variety of equipment options.

After the submissions deadline passed, the ERA, with the assistance of its consultant ICF International, checked all bids against threshold requirements, and then meticulously evaluated them in accordance with the criteria set out in the RFP.

The concept was that, while the lowest price was the most important aspect of the evaluation as this determines consumer costs, the non-price factors attempted to assess the strength of the bids in other areas – such as the cleanest power-generation models.

“Once we announce the winner of this bid, we look forward to continuing and further developing our professional relationship with all stakeholders, and interested parties, to ensure a well-regulated and secure electricity sector, as well as exploring all avenues to further reduce the cost and improve the diversity of our electrical energy supply,” added Mr. Farrington.

For more information on the bid process, please visit the ERA website at www.caymanera.ky

(GIS)

For further information contact: Lennon Christian