After filing the paperwork earlier this week, Public Services Commission members are now waiting on a V.I. judge to rule on whether interest paid by the V.I. Water and Power Authority on its fuel loans can be used as a factor to increase the Levelized Energy Adjustment Clause (LEAC).
Commission members and their attorneys appeared in court last month after one of its ex officio members, Sen. Alicia “Chucky” Hansen, filed a suit challenging the PSC’s decision to increase LEAC rates from July 1-Sept. 30, 2011.
In a decision that came down on Jan. 12, 2012, Superior Court Judge Harold Willocks dismissed two of the main issues raised by Hansen, but sent the third back the PSC for an “appropriate finding.”
For the LEAC period in question, direct fuel payments account for $62.5 million in LEAC charges, according to a 2011 PSC report by Georgetown Consulting Group. Principal on the$40 million loan used to purchase fuel makes up another $2 million and the interest on that loan – which is what the judge sent back to the PSC for reconsideration – amounts to $435,000, or less than one-percent of total LEAC billing during the July to September period.
According to previous Source articles, Willocks disagreed with Hansen’s legal argument in his Jan. 12 decision, but still sent the question back, directing the PSC to file all of the information needed to support its case within 15 days.
At a meeting last week, PSC members spoke about the need for flexibility when setting the LEAC based on the volatility of oil prices and WAPA’s demand for fuel, but approved a draft policy requiring WAPA to include certain information with each request to increase or decrease the LEAC.
According to the draft policy, WAPA would be required to detail its latest LEAC proposal, what is has outstanding in deferred fuel costs, and how any outages or loss in revenues has affected its operating budget.
The authority would also have to file information showing how past LEAC changes and new LEAC petitions have been, or would, be calculated.
Finally, a summary is also required of both the electric and water LEACS, including all associated costs.
PSC spokeswoman Lorna Nichols said Wednesday that the commission has complied with the court’s order and filed the additional information, and is now waiting on the judge to rule if WAPA’s interest payments can or cannot be factored into the rates.