Montserrat Utilities Ltd. (MUL) is experiencing severe financial distress due to non-payment of bills by customers and increased fuel costs.
The Cabinet Briefing Notes from July 18, 2022, reported that the Cabinet received a presentation by Colin Fergus, Permanent Secretary in the Ministry of Communications, Works, Labour & Energy (MCWLE), Kendall Lee, MUL’s Managing Director and Financial Comptroller of the Montserrat Utilities Ltd (MUL) “detailing the serious financial challenges facing the company. Cabinet was informed that MUL has been thrust into severe financial distress.”
Based on the company’s assessment, three factors have contributed to its current financial situation. Increased maintenance costs at the Shinlands power station and the utility infrastructure across the island was one of the main factors. The escalating cost of fuel which has doubled in six months from XCD$640,000 in January 2022 to 1.2 million in June 2022, was another reason. The third factor is the “increased delinquency among customers in the payment of bills resulting in the company having to subsidize the fuel surcharge over the last few months.”
Customers’ outstanding bills are said to be about XCD$2 million. No plan was presented on how the company aims to reduce customer delinquency.
The Cabinet has requested a proposal from MUL for the company’s long-term business model, given that the Government of Montserrat has said it wants to move to 100% renewable energy by 2035.
MCWLE is expected to release terms of reference for delivering geothermal energy to Montserrat, in September.