CUC reduces fuel-adjustment charge
05 Aug 2016
- By Junhan B. Todiño – email@example.com – Variety News Staff
THE Commonwealth Utilities Corp. has reduced the fuel-adjustment charge or FAC pass-through rate following a decrease in average fuel prices.
The $0.14670 per kWh fuel-adjustment charge previously known as the levelized energy adjustment clause or LEAC decreased to $0.13924 per kWh effective Aug. 1.
In a statement, CUC said due to the decrease in the FAC rate, residential customers who use 500 kWh of power per month will pay $3.73 less in their monthly billing.
CUC first implemented the fuel-adjustment charge in 2009 to recover fuel and fuel related costs.
CUC said FAC is used to purchase fuel and serves as one of the two components that make up a power bill.
The second rate component is the electric base rate, which is used to fund operations, projects and debt servicing.
The Commonwealth Public Utilities Commission has granted CUC the ability to adjust the FAC rate based on the price of oil.
The adjustments are made when the Mean of Platts Singapore monthly pricing equals or exceeds a 4.5 percent differential of the average per gallon cost of fuel used in the calculation of the FAC rate.
CUC said the Commonwealth Public Utilities Commission will be conducting periodic reviews of the fuel charges to ensure that consumers pay no more or less than the actual cost of fuel.
CUC said CNMI consumers have experienced an almost 54 percent decrease compared to the fuel rate in mid-2014.