Nov. 8, 2008 — The V.I. Water and Power Authority asked the Public Services Commission on Friday to slash the Levelized Energy Adjustment Clause by more than one-third.
delivered the petition for the rate reduction to the PSC offices.
While the new rate would be effective Jan. 1, 2009, if requested by the PSC, WAPA could implement the reduction on Dec. 1 with slight adjustments to the numbers based on present fuel costs. WAPA Executive Director Hugo Hodge Jr. said the utility has been working very closely with Gov. John deJongh Jr. and the PSC to lower electricity costs for WAPA customers.
The proposed LEAC, the surcharge which covers the cost of fuel used to produce water and power for WAPAs customers, is 0.21166, an 11 cent or 34 percent reduction from the present factor of 0.32217 in effect since Oct. 1. It is also 49 percent below the September LEAC factor of 0.41395. In the new petition, the average residential WAPA customer using 500 kilowatt hours (kWh) monthly will pay $148.22, a reduction of $55.57 or 27 percent from the current overall monthly billing of $203.79.
Hodge said the monthly bill for the average commercial customer using 1200 kWh and presently paying $564.40 will decrease by $143.91 or 25.5 percent to $420.49. Large power customers at 30,000 kWh monthly paying for power at a cost of $15,625.18 will now pay $11,196.94, a decrease of $4,428.24 or 28.3 percent
Two major factors influenced the proposed reductions, Hodge said. A barrel of crude oil which peaked in July at $147 per barrel has since fallen 60 percent to about $60 a barrel last week. This represents a significant savings on the 200,000 barrels a month WAPA uses to run the generators in its power plants.
With deJongh's assistance, WAPA successfully negotiated a $40 million loan from First Bank Virgin Islands to pay off the utilitys debt to HOVENSA for fuel purchases earlier this year, the cost of which was under recovered from customers. The under-recovery costs were eliminated from the LEAC factor and replaced with a smaller amount to cover the cost of the loan.
With PSC approval, the water LEAC factor for the average residential customer using 2400 gallons will be $5.81 per thousand gallons which is 58 percent below the $13.72/thousand gallons residential customers pay currently. Bills will drop from $71.49 to $52.40 or by 26.7percent.
Hodge said the petition will be discussed at a special PSC meeting Wednesday.
"We are really looking forward to Wednesdays meeting," Hodge said. We would love to see people with extra money in their pockets for Christmas."
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