The Commonwealth Utilities Corp. expects to collect $122.4 million this fiscal year and sees no rate adjustments taking effect this month, according to chief financial officer Charles Warren yesterday.
“Based on CUC's [fiscal year] 2013 budget, collections this year are expected to be about $122.4 million. Of course, actual amounts will vary due to LEAC [levelized energy adjustment clause] adjustments required by changing fuel costs,” Warren told Saipan Tribune yesterday.
LEAC is part of the customer's bill that reflects the cost of fuel. It goes 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.
For this month, Warren foresees no LEAC adjustment being made. He explained that changes in the LEAC rates are made based on average fuel prices of the previous month.
“Therefore, we do not know, until after each month ends, if adjustments are needed or not. Based on average January prices, no change to the LEAC [will be] made for February,” he said.
CUC last reduced the LEAC rate on Jan. 7 by 4.6 percent due to the decline in average fuel prices.
The existing LEAC rate is $0.29751 per kilowatt-hour.
Since the start of the fiscal year in October last year, the utilities corporation has already collected about $32.5 million. This includes the $5.2 million it recently collected from its three biggest customers: the central government, public schools, and the public hospital.
In November last year, CUC had about $19.4 million in outstanding receivables from its customers.
CUC is a nonprofit organization whose operation relies heavily on the payment of its power, water, and wastewater customers.
Warren earlier said that since the utilities corporation is budgeted to have zero profit, failure to collect for all services billed results in delayed payment to vendors and eventually a reduction in services and system maintenance.
CUC has been in a state of emergency since December due the financial crisis at the agency.