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LEAC rate goes down a 3rd time
As expected, the Commonwealth Utilities Corp. cut its LEAC rate once again—the third time this year—to reflect the continued decline in fuel prices.
Effective yesterday, the levelized energy adjustment clause, or LEAC rate, which accounts for 70 percent of power bills, was reduced, resulting in a drop of 1.55 cents per kWh.
“CUC announces a reduction in the LEAC fuel charge pass-through, due to continued decline in average fuel prices. CUC is able to reduce the LEAC rate by 6.16 percent,” CUC executive director Alan Fletcher said in a statement yesterday.
The LEAC rate of $.25168 per kWh will go down to $.23616 per kWh.
The average residential account using 500 kWh will see a decrease in their bill of about $18.67 per month.
The first time CUC dropped its LEAC rate this year was on Sept. 8, from $.30426 per kWh to $.28902 kWh. CUC again reduced its LEAC rate on Nov. 2, from $.28902 per kWh to $.25168 per kWh.
The Commonwealth Public Utilities Commission allowed CUC in July this year to adjust the LEAC charge every month, instead of every six months, which will allow CUC to adjust monthly pricing based on the “Means of Platts Singapore” or MOPS’ monthly pricing.
LEAC is one of two components of a customer’s power bill. LEAC accounts for fuel purchases while the second component—electric base rate—is used to fund CUC’s operations, projects, and debt servicing.
“CUC is encouraged by the continued downward trend in the oil markets, noting that since September 2014 consumers have experienced an approximate 23 percent decline in the LEAC. We are hopeful the markets continue this trend as the reduction in fuel prices directly translate into lower power bills, a welcome relief for consumers,” Fletcher said.
