In March 2012, FortisTCI and AEP Limited submitted their Annual Regulatory Filings for the year ended December 31, 2011 to the Electricity Commissioner including corresponding audited financial statements. FortisTCI and AEP Limited (the “Company” or “FortisTCI”) are required to submit their Annual Regulatory Filings and audited financial statements each year.
Reflecting continued economic weakness of the local economy, on a consolidated basis FortisTCI had marginal overall growth of 0.3% in energy demand for the year ending December 31, 2011.
The Company registered year-over-year growth only during the months of November and December 2011, with overall annual sales remaining relatively
flat at 170.4 GwH in 2011 compared with sales of 170.1 GwH in 2010.
All sectors showed a year-over-year decline in electricity sales except for commercial and small hotels, driven primarily by a strong 2011 tourist season.
Electricity sales for large hotels decreased by 1% mainly due to extended closures for restoration following the passage of Hurricane Irene in the third quarter, while residential sales decreased by 2% as residents increased energy conservation efforts.
The Company continues to manage its controllable expenses well. Although the company reported a 4% increase in operating expenses against prior year, this was
partially offset by decreased energy costs, lower maintenance expenses, and decreased wages and compensation expenses resulting from improved engine heat
rate and efficiency at the generating plant. Other influences were, upgraded preventative maintenance procedures, the results of the Company’s 3-year salary
freeze and improved unit man-hour productivity.
The Company’s continued capital investments combined with the current period of low sales growth and no increase in customers’ basic tariff rates, resulted in a lower Return on Rate Base (RORB) and an increase in aggregated Rate Base to $165.7 million, up by 17% from 2010. For year ended December 31, 2011, RORB was 7.5% with an average return over the last 5 years of 9.7%. The Company earned profits of $8.7 million for 2011.
FortisTCI Capital Investments totalled $26.37 million in 2011, which incorporated the commissioning of its second Wartsila engine that contributed to improved generating efficiency, reduced maintenance costs, and improved reliability. Other major projects included completion of the corporate headquarters and customer service centre, and the construction of a state-of–art 800,000 gallon fuel storage facility which significantly increased on-site storage capacity and improved fuel supply security. In addition, the Company invested in a comprehensive Groundwork Management System, the first of its kind in the Turks and Caicos Islands. One of the primary purposes of the Groundwork Management System is to mitigate the amount of water, in a severe rain event, entering Leeward Highway from the Company’s site, a problem that persists up and down Leeward Highway.
“Although we had an extremely busy year, the Company and its employees rose to the challenge. Major headwinds included the continuing global recession and the impact of Hurricane Irene which resulted in the temporary closure of some of our commercial customers. Our employees did a magnificent job at restoring service in the aftermath of the hurricane and our annual Average System Availability Index (ASAI) remained above 99.9%. Despite the economic recession, we continued to be a significant investor which provided much needed buoyancy to the local economy. Our investments in both physical and human assets are part of the Company’s long term strategy to ensure that the TCI has one of the best electricity systems in the world.” stated Eddinton Powell, CEO.
Mr. Powell added that “the current spike in fuel prices, which has driven up the cost of electricity to our customers, remains one of our biggest challenges. Nevertheless, we have been able to reduce the number of gallons we consumed in the generation of electricity from 12,917,651 gallons to 12,666,431 gallons, year-over-year, through efficiency improvements up and down our system value chain. We are committed to increasing fuel efficiency even further”.
