URCO launches Consultation on Draft Determination to Amend Island Energy Limited Transmission and Distribution Licence

GRAND CAYMAN, Cayman Islands – 6 February 2026. The Utility Regulation and
Competition Of6ce (URCO) has published E&U 2026 – 1, a Draft Determination on the proposed
amendment of Island Energy Limited’s (IEL) (Formerly Cayman Brac Power and Light)
Transmission and Distribution (T&D) Licence. The consultation period opened on 2 February 2026
and will close at 5:00 p.m. on 16 February 2026.

The Draft Determination has been issued in accordance with the Utility Regulation and
Competition Act and provides an opportunity for IEL, and any other interested person to
comment on proposed licence amendments.

Purpose of the Draft Determination
The proposed amendments are intended to strengthen consumer protection in electricity
services for Cayman Brac and Little Cayman. The Draft Determination establishes clear
rules governing how electricity charges are set and adjusted, providing consumers with
greater transparency and predictability while ensuring the licensee can maintain reliable
service delivery and improve efDciencies in energy production.
Importantly, the proposed regulatory framework will provide IEL with the clarity needed
to move forward with planned investments in renewable energy infrastructure. By
establishing a transparent and sustainable rate-setting mechanism, URCO aims to
facilitate the transition toward cleaner energy sources while protecting consumers from
unpredictable price fluctuations.

Key elements of the proposed amendments
The Draft Determination includes a proposed amended T&D Licence, which introduces
or updates provisions relating to:

• Rate Cap and Adjustment Mechanism (RCAM): The proposed RCAM would take
  effect from 1 January 2026, with annual rate adjustments requiring URCO approval
  where necessary and linked to inflation and productivity factors, while
  incorporating safeguards based on the licensee’s allowed return on rate base.

• Rate structure and base rates: Base Rates would be clearly deDned and
  restructured to exclude fuel costs and government or regulatory charges,
  improving transparency for consumers. Customers will be able to see exactly what
  portion of their bill reflects the cost of electricity delivery versus pass-through costs
  beyond the utility’s control.
• Pass-through charges: Fuel costs and government and regulatory costs would
  be shown as separate line items on customer bills, supported by tracker accounts
  to ensure these costs are passed through without Dnancial gain licensee. This
  transparency measure protects consumers by ensuring they only pay actual costs
  without hidden markups.
• Reporting and oversight: Enhanced reporting obligations are proposed, including
  quarterly operational reporting and cost-of-service studies, alongside a Dve-year
  review of RCAM and rate design. These measures strengthen URCO’s ability to
  monitor the utility’s performance and protect consumer interests through
  evidence-based regulation.

Consultation and stakeholder input
URCO considers consultation to be a fundamental element of regulatory accountability
and procedural fairness. Consumer input is particularly important in ensuring that the
proposed framework adequately protects residential and business customers while
supporting the investment needed for reliable and sustainable electricity services.
Stakeholders are invited to comment on the Draft Determination,
The Draft Determination and supporting documents are available on URCO’s website at
https://www.ofreg.ky/consultations.
All submissions must be made in writing and received by 5:00 p.m. on 16 February 2026.
Submissions may be sent by:

• Email: [email protected]
• Post: Utility Regulation and Competition OfDce, P.O. Box 10189, Grand Cayman
  KY1-1002
• Courier: Utility Regulation and Competition OfDce, 3rd Floor, Monaco Towers II,
  11 Dr. Roy’s Drive, Grand Cayman

Parties submitting confidential information are required to also provide a redacted version
for the public record, together with reasons for conDdentiality, in accordance with section
107 of the Utility Regulation and Competition Act. Requests for extensions must be
submitted no less than four (4) days before the consultation deadline and must include a
full justiDcation.

Following consideration of submissions received, URCO will issue a Final Determination.
If adopted, the amended T&D Licence will take effect upon approval by URCO’s Board of
Directors.
-ends-

ABOUT URCO The Utility Regulation and Competition OfDce (‘OfReg’. ‘URCO’, or the OfDce’) is the independent regulator established by section 4 of the Utility Regulation and
Competition Law (as revised) (the ‘URC Law’) for the electricity, information, and
communications technology, water, wastewater and fuel sectors in the Cayman Islands.
URCO provides the opportunity for consistency and collaboration in regulation across the
ICT, energy, fuel, and water sectors; better utilisation of skills and resources resulting in
more efDcient and effective regulatory processes; encouraging competition where
appropriate and feasible; championing sustainability and innovation across markets,
contributing to the economic and social goals of the Cayman Islands.