The Commonwealth Utilities Corp. has approved a lower power rate for its customers due to a decline in the cost of fuel in the world market.
CUC chief financial officer Charles Warren disclosed yesterday that the levelized energy adjustment clause, or LEAC, will see a reduction of 4.6 percent effective Monday, Jan. 7, 2013.
“Due to a decrease in average fuel prices last month, the LEAC will be adjusted effective Jan. 7, 2013,” he said.
The new LEAC rate is $0.29751 per kilowatt-hour, about 4.6 percent less than the current rate.
The average residential account will see a decrease of about $6.50 per month, Warren said.
LEAC is part of the customer's bill that reflects the cost of fuel. It is supposed to go up or down to reflect the cost of buying fuel to run the power plants. The other component of the bill is the electric base rate.
Adjustments in utility rates usually require the review and approval of the Commonwealth Public Utilities Commission but since CUC remains under a state of emergency, this suspends the commission's oversight of CUC.
For many customers, the 4.6 percent adjustment is too small for families to feel the impact on their monthly electric bills.
Alex Pillarina, 35, a father of two children, said the small adjustment will result in only about $3 savings on their usual monthly rate. His family consumes 200 to 220 kilowatts per month and pays an average of $80 monthly.
Citing the high cost of gas on island, which remains at $5 per gallon, and the increasing prices of commodities and services, he thinks the CUC adjustment will have no measurable impact on their household costs.
College student Jovan Fred expressed similar sentiments, believing that CUC's rates have been the highest among neighboring islands. The small adjustment, she said, will not really impact a family like hers that pays an average of $300 to $400 per month on their electric bill.
CUC officials earlier disclosed that the number of its power customers continue to decline due to the general economic slowdown being experienced on the island and impact of the new federal immigration system.
Since the federal government took over the labor and immigration system of the Commonwealth, many nonresident workers have left the island while many local residents opted to relocate due to the lack of employment and high utility rates.
Saipan Tribune learned that CUC's power client base at present is a little over 14,000.