CUC announces power rate hike
04 Apr 2016
- By Junhan B. Todiño – firstname.lastname@example.org – Variety News Staff
THE Commonwealth Utilities Corp. announced on Friday that there will be an increase in the fuel adjustment charge or FAC previously known as levelized energy adjustment clause or LEAC pass-through rate.
An increase of $0.01924 in the FAC was due to a rise in average fuel prices, CUC said, adding that the current FAC fuel charge of $0.09359 per kWh will increase to $0.11283 per kWh effective April 1, 2016.
As a result, residential customers who use 500 kWh of power per month will pay $9.62 more on their monthly bills, CUC said.
On April 1, 2016, the Wall Street Journal reported that “Crude Oil Prices Sink as Saudis Balk at Production Curbs.” On the same day, according to Reuters, “Oil Tumbles 4 Percent.” The Week said “Oil Prices May be Stuck for the Rest of the Year.”
As of press time Sunday night, CUC had not responded to Variety’s request for comment.
The pass-through rate was instituted in 2009 to recover fuel and fuel-related costs, CUC said, adding that this system is also used by power providers in Guam and the U.S. Virgin Islands.
In May 2015, the Commonwealth Public Utilities Commission authorized CUC to change the name of LEAC to FAC to provide customers a more accurate description of the rate.
CUC said FAC is used to purchase fuel and serves as one of the two components that make up a power bill.
A second rate component is the electric base rate, which is used to fund operations, projects, and debt servicing.
The Commonwealth Public Utilities Commission granted CUC the ability to adjust the FAC rate based on the price of oil. CUC said adjustments are made when the Mean of Platts Singapore monthly pricing equals or exceeds 4.5 percent of the average per gallon cost of fuel used in the calculation of the FAC rate.
CUC, in a statement, said although there will be a slight increase in the April 2016 FAC, CNMI consumers have experienced an almost 60 percent decline in the FAC since mid-2014.