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Charlotte Amalie
Wednesday, February 21, 2024


Nov. 18, 2003 – The Water and Power Authority, rebuffed by the Public Services Commission last week in a bid for an emergency rate increase for potable water service, is now asking the PSC to approve a plan to bill both power and water customers over 12 months for the nearly $15.4 million WAPA says they owe for the cost of fuel oil.
The oil cost is what is reflected in the levelized energy adjustment clause, or LEAC, surcharge on customers' bills.
"The authority is requesting a reasonable balance between the impact on its electrical and water customers and its own critical cash-flow situation by providing for a 12-month payback period to recover the underbilling of fuel," WAPA's executive director, Alberto Bruno-Vega, said in his semiannual report on the LEAC.
"Relief through the LEAC is critically needed," he said.
WAPA wants the electrical LEAC factor for January-June 2004 increased such that an average residential customer using 500 kwh of electricity per month would see an increase of $10.38, to $101.44 from $91.06 — or of 11.4 percent.
It wants the potable water LEAC factor to be increased from the current $.39 per thousands gallons to $1.42 per thousand gallons. This would mean an average increase for customers using 2,400 gallons of water a month of $2.47, to $41.97 from $39.50 — or of 6.2 percent.
PSC rules and regulations call for the commission to review the LEAC surcharge rate every six months and to adjust it to reflect WAPA's unrecovered fuel costs in producing electricity and water for the preceding six-month period.
According to Bruno-Vega, high world market oil prices "as a result of the unstable and uncertain developments in Iraq" have eroded WAPA's cash-flow position "to a record red ink of $15,360,000 for the combined projected underbilling for the electric and water systems as of Dec. 31."
The utility's overall "cash-flow deficit" is $29.6 million at present, Bruno-Vega said, citing current accounts receivable of nearly $14.3 million from the central government and the semi-autonomous agencies.
A WAPA release stated that the utility's May 15 report covering the period July 1-Dec. 31, 2003, projected that as of June 30, customers would owe the authority about $8 million for unrecovered electricity fuel costs and nearly $1.2 million for unrecoverable potable water fuel costs.
As of Oct. 1, the actual underbilled fuel costs were nearly $10.2 million for electricity and nearly $1.6 million for potable water, the release stated. And those amounts are expected to increase to $13.4 million and $1.9 million, respectively, by Dec. 31.
Bruno-Vega said WAPA projected the cost of oil at $29 per gallon in its May 15 report, but the actual cost of oil purchased from Hovensa has been in excess of $31 per barrel.

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