LEAC rate cut approved

Paying for your power bill will be a little lighter on the wallet after the Commonwealth Public Utilities Commission approved Saturday to reduce the Commonwealth Utilities Corp.’s levelized energy adjustment clause, or LEAC rate, effective Nov. 20.

The new LEAC charge is $0.30791 per kilowatt-hour—a 10.6 percent drop from the $0.34426 that customers used to pay before the commission’s new order.

The LEAC rate reflects the cost of fuel that CUC buys to run its power plants. The new rate consists of the following elements: fuel and lube oil, $0.28761 per kWh; volatility allowance, $0.01783 per kWh; and regulatory/technical support, $0.00247 per kWh.

CPUC chair Viola Alepuyo approved the new rate after determining that the new charge is just, reasonable, and necessary.

CUC chief financial officer Charles Warren and deputy executive director Alan Fletcher said they were pleased with the commission’s decision because it will bring substantial relief to all customers.

Warren said the new LEAC rate will reduce by 10.7 percent the bill of the average CUC customer who uses up to 500 kWh a month. Commercial and government customers are projected to see an 8.8 percent reduction in their power bills.

About 70 percent of CUC’s customers are residential consumers.

According to Fletcher, both CUC and Georgetown worked hard to come up with a LEAC rate they were both agreeable to. Each earlier filed different rate reduction.

“We worked hard all throughout last week in order to be able to come up to an agreement and we’re very thankful to everybody involved in that process, including the commission and the hearing examiner,” said Fletcher.

Warren disclosed that CUC will file a new LEAC petition in January 2012.

Prior to approving the rate cut, PUC chair Alepuyo had some pungent words for CUC about the commission’s longstanding concerns on delinquent government and autonomous agencies, including the “preferential treatment” being accorded these agencies such as free reconnections.

“In the April hearing, I made it clear that CUC needs to address the central government’s delinquent accounts, not just the nonpayment but actual disconnection and reconnection without payments. That’s unfair to the layman consumer because any other person on the street, when they are disconnected, in order to be reconnected they have to either make payment or enter into some kind of agreement, whatever the CUC regulation is. This preferential treatment is unfair to other consumers and instead of addressing this issue, it’s gotten worse because we have PSS with an even bigger amount than what the CNMI government owes,” she said.

Alepuyo warned that the commission will not act on CUC’s petition to increase its water and wastewater rates if this problem with delinquent accounts is not rectified.

Fletcher, in an interview after the Saturday meeting, denied providing preferential treatment to government agencies such as PSS, saying the consideration they accord PSS is “wise treatment” and the “right thing to do.”

“I think we’re going the right way. There’s no unfair or special treatment. It’s just the reality of doing business in this severe economic climate.”

PSS and the central government owe CUC a combined $6 million as of Sept. 30.