Page 37 - CARILEC Electricity Tariff - December 2014

Fuel Price
Hedging Fuel Supply Logistics And Fuel Alternatives
Name of Utility Impacts Of Fuel Price Volatility
Initiative(s) Challenges And Prospects
Adopted
contracts
layered at
approximately
10% - 20% per
layer, with
10% left
unhedged.
Grenlec currently has
0.18 MW of PV
installed for
generation and is in
the process of building
PetroCaribe operates a tank farm further PV
adjacent to the Power plant which capacity. Also studies
None on the company, entire cost
GRENLEC No heavily minimizes the challenges are being conducted to
of fuel passed on to the customer.
in supply logistics. have both wind and
geothermal
alternatives added to
the system. We are
also exploring LNG
and methanol.

1. High utility bills, which
results in high receivables and
sometimes drives bad debt
Fuel is supplied to us by the
2. Need for increase working
national oil refinery Petrojam.
capital.
This is transported to different
3. Foreign exchange exposure
location through different means
4. Increase propensity for theft
such a trucking, pipeline and
of service (high systems storage facilities. LNG and natural gas
JPSCO losses). Yes liquid market – LPG

5. Increase fuel penalty due to (propane or butane).
Challenge: JPOs has limited
under-recovery of fuel cost
storage facilities and has existing
due to increased system
fuel delivery channels which are
losses.
difficult to change.
6. Reduction in electricity sales
due to the impact of price of
elasticity of demand.

Currently we
hedge using
swaps for 75%
of the Exploring indigenous
LUCELEC - estimated - sources such as
consumption geothermal
on a rolling 12
month period.

Small deliveries by ship to
None – managed through fuel
MUL No Supplier. Deliveries every other No
surcharge
day to site by supplier.

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