CUC: No power rate adjustment despite fuel price drop

GOOD news: fuel price went down. The not-so-good news: it doesn’t mean anything for ratepayers because the power rate won’t  go down.


The Commonwealth Utilities Corp. said on Tuesday the rate of fuel price drop is not enough to warrant a reduction in fuel adjustment charge or FAC rate this month.

In a statement, CUC said it was informed by Mobil Oil Marianas Islands Inc. about a slight decrease in the Mean of Platts Singapore monthly fuel price from February to April.

“The decrease did not equal or exceed a 4.5 percent differential of the average per gallon cost of fuel,” CUC said, adding that there will be no adjustment made to the overall CUC kWh rate for the month of April.

The FAC will remain at $0.20109 per kWh.

Based on the previous order of the Commonwealth Public Utilities Commission, CUC is required to make an adjustment of its pass-through  rate when the Mean of Platts Singapore  monthly  pricing  equals  or exceeds  a 4.5  percent  differential   of the  average per gallon cost of fuel used  in the calculation  of the FAC.

This FAC is one of two components   that make up CUC’s electric kWh rate and is used to purchase fuel.  The second component is the CUC base rate which funds operations, projects and debt service. 

The base rate for 1 to 350 per kWh power consumption is $0.0210 for residential customers; $0.1130 for commercial customers; and $0.1240 for government accounts.

CUC said the base rate not been increased since April 17, 2014.

CUC  first instituted  the FAC, previously called the levelized energy adjustment clause  or LEAC rate, in 2009 to recover  fuel  and fuel related  costs. This system is also  used by power  providers  in Guam  and  the U.S. Virgin  Islands, CUC said.

Source: Marianas Variety :

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