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LEAC rate cut takes effect today
The Commonwealth Utilities Corp. approved a 10.81-percent cut in the current levelized energy adjustment clause effective today in the wake of a series of cuts in world fuel prices.
The clause, also called the LEAC, will go down from the current rate of $0.29569 per kilowatt-hour to $0.26373 per kWh effective today, July 6.
LEAC is part of the customer’s bill that reflects the cost of fuel. It is supposed to go up or down to reflect the cost of buying fuel to run the power plants. The other element of the bill is the electric base rate.
According to CUC chief financial officer Charles Warren, the new rate’s impact on average residential customers using up to 500 kWh monthly is a savings of $11.95 on their monthly bill.
The new rate will bring savings to rate payers amounting to more than half-a-million dollars each month, Warren said.
“The new fuel charges will save CUC’s rate payers over $500,000 a month, and we’re pleased that the current LEAC tariff allows CUC to make this savings immediately available to our customers,” he told Saipan Tribune yesterday.
CUC last reduced its LEAC rate on June 5.
The continuing decline of fuel prices in the world market has also prompted oil companies in the CNMI to cut their pump prices.
The new LEAC rate is composed of the following elements: LEAC fuel and lube oil element ($0.24923); volatility element ($0.01122); regulatory and technical support element ($0.00123); reconciliation element ($0.00807); allowance for doubtful accounts ($0.01012).
Because electricity is also being used to pump water and wastewater systems, Warren hinted that water electric charge and wastewater electric charge to customers will also be reduced. However, the numbers are still being crunched as of press time.
“We anticipate a reduction in the WEC and WWEC, but will not know for sure until the calculations are complete,” Warren said.
Even without the Commonwealth Public Utilities Commission, CUC can adjust its rates because the last time the commission met in January 2012, it allowed the automatic adjustment of the LEAC rate so long as it will not exceed 4.5 percent of the current LEAC rate. Once the commission reconvenes, the new rates will be up for review.
By Moneth Deposa
Reporter
