Another power rate cut seen

Based on the initial information gathered by the Commonwealth Utilities Corp., power consumers on Saipan may experience another rate reduction this month.

CUC chief financial officer Charles Warren disclosed to Saipan Tribune on Sunday that based on preliminary data, “we should expect another decrease.”

CUC cut its levelized energy adjustment clause rate by 10 percent on June 5 after prices of fuel in the world market dropped in April.

Warren could not immediately say how much the possible rate reduction would be, pending all the data and information needed to calculate the new rate.

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 element of the bill is the electric base rate. In calculating the LEAC rate, CUC uses pricing from the Mean of Platts Singapore.

The current LEAC rate is $0.29569 per kilowatt-hour.

According to Warren, customers will experience further rate declines in the future once CUC fulfills its payments to independent power producer Pacific Marine Industrial Corp., whose contract CUC bought out for $7.25 million. The buyout took effect last Saturday, giving CUC control over Power Plant 4.

“Eventually, after we pay them our operating expenses would be about $340,000 less than the current. This will bring positive impact on our rates,” he told Saipan Tribune, adding that CUC will pay PMIC over $300,000 monthly.

Meantime, PMIC director Marcin Ostrowski told Saipan Tribune during the turnover ceremony for Power Plant 4 at 360 Revolving Restaurant that CUC is current in its obligations to the company.

Even without the Commonwealth Public Utilities Commission at this time, CUC can make necessary adjustments to its rates because the January 2012 tariff allows an automatic adjustment of the LEAC rate not to exceed 4.5 percent of the current LEAC rate.

By Moneth Deposa

Moneth G. Deposa | Reporter

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