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HomeNewsArchivesPSC EXTENDS WAPA SURCHARGES, PLANS RATE STUDY

PSC EXTENDS WAPA SURCHARGES, PLANS RATE STUDY

July 3, 2001 — While the Public Services Commission didn’t approve electric billing surcharge changes and two rate adjustments requested by the Water and Power Authority on Friday, it did extend the current surcharges at their present rates through August 2002.
WAPA approached the PSC Friday with three requests, all of which it had submitted in writing on May 15:
– To incorporate four current surcharges into the base rate.
– To increase the "fuel component" of the base rate by 0.75 cent per kilowatt hour, which it said would have the effect of lowering the separate "levelized energy adjustment" surcharge on customers' bills.
– To keep the current levelized energy adjustment rate of 4.9361 cents per kwh in place through the first half of Fiscal Year 2000, then reduce it to 2.472 cents for the second half of that fiscal year.
The four surcharges are listed as "waste heat recovery boiler," "asbestos abatement," "emergency rate increase," and "payment in lieu of taxes." These were originally instituted "to resolve certain specific and timely issues," a WAPA release said, and "some of these issues have run their course."
Last September, the PSC rejected an April 2000 WAPA request for a base rate increase. Instead, the commission extended the existing surcharges to July 1 of this year.
On Friday, two days before July 1, the PSC did not grant any of the WAPA requests, saying a rate study is needed first. Instead, it voted to extend the current surcharges again, this time through August 2002. The extension includes the energy adjustment surcharge at its current rate.
According to a WAPA release, an increase in the fuel component of the base rate is intended to recover not only current fuel expenses but also increased costs which were had not been recovered from previous periods. The energy adjustment, instituted to cover fuel costs higher than those included in WAPA's base rate, is recalculated every six months based on the market price of oil. WAPA submits proposed fuel charges to the PSC for review before implementation.
With an increase in the fuel component rate, the release said, unless there are significant changes in oil prices, consumption and other factors, "customers should see a reduction" in charges for the energy adjustment portion of their bills.
At Friday’s meeting, Joseph Thomas, WAPA’s executive director, said because the price of oil is dropping slightly on world markets, maintaining the level of the energy adjustment surcharge will allow the utility to keep its revenues from dropping. He said WAPA needs to do this because it is behind in its payments to Hovensa, its oil supplier.
According to the WAPA release, the requested rate adjustments "represent dollars that are vital to WAPA’s ability to provide service and meet its present debt service coverage."

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