PSC Leaves Fuel Surcharge Unchanged Pending More Information

The Public Services Commission voted Wednesday to keep the Levelized Energy Adjustment Clause unchanged for now. The LEAC is a fuel surcharge on Water and Power Authority bills which recoups the cost to purchase fuel to run the utility’s generators. It was created to allow WAPA to pay for fuel when there are abrupt changes in price. The fuel surcharge became extremely unpopular in the U.S. Virgin Islands after oil prices increased dramatically after the cost of fuel oil shot up in the early years of the new millennium.

(Image courtesy of the St. Louis Federal Reserve)

The PSC is considering a request to increase the LEAC in response to changes in fuel prices. WAPA has largely switched over to using natural gas to fire its generators. While less expensive than fuel oil, it is also subject to market fluctuations. And WAPA is struggling to pay for the work to convert to using natural gas. With electricity costing a lot in the territory, the St. Croix Chamber of Commerce and others have come out against increasing the unpopular fuel bill. They point to perceived poor management at WAPA as justification for not allowing the publicly-owned utility to charge customers what it pays for fuel.

If WAPA does not pay for fuel, it will not receive fuel to run its generators.

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A new hearing is set for July 31. WAPA petitioned the Commission to change the current LEAC Rate of 19.26 cents per kilowatt hour to 23.5 cents per kilowatt hour for the proposed period. That would be a 22.1 percent increase in that part of the bill and would mean overall increases of between 9.5 and 10.95 percent, according to a statement from the PSC. The PSC passed a motion to require WAPA to do a full financial audit, in support of its pending base rate application, of the VITOL infrastructure and operation and management contracts, along with full disclosure of ownership of any and all affiliate companies to which work and services were subcontracted or to whom business was otherwise directed. The financial information must be received before the Base Rate application comes before the Commission.

Waste Management Authority
WMA Chief Executive Officer Adrian Wade Taylor said WMA is doing fine and will not be placed in receivership. WMA has acquired 113 acres in the Anguilla Landfill area outside of Federal Aviation Administration limits and also 13 acres in Bovoni, which will help it address orders to close both landfills.

WMA also has nine new bin sights on St Thomas, two new sites on St. John and three new sites on St. Croix. As of today, WMA is totally reliant on the VI Government for its funding until they start to collect fees.

Telecommunication
Viya was granted their request for an extension to June 30, 2019, to file required documents under Docket 653 for the Transfer of Control. Also, the status update on Universal Service Funding for USVI connect, Federal Communications Commissions and Lifeline programs, that bring federal funding into the territory for qualifying individuals under the Human Services umbrella, are on target according to Viya CEO Geraldine Pitts and Viya Public Relations, Jennifer Matarangas-King.

Wednesday’s meeting was held at the PSC Barbell Plaza location while teleconferenced in the St. Croix Education office. Chair Raymond Williams, Vice Chair David Hughes, Commissioners Kent Bernier, Andy Rutnik and Johann Clendenin were present along with Sen. Athneil “Bobby” Thomas, who serves ex officio as a commissioner, as a representative of the Legislature.

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