CUC cuts LEAC rate by 10 pct.

Posted on Jun 05 2012

Good news for power customers: The Commonwealth Utilities Corp. has approved a cut in its levelized energy adjustment clause, commonly known as the LEAC rate.

CUC cut its LEAC rate by 10 percent effective June 5, following a decline in the price of fuel in the world market, according to the latest schedule of electric charges and rates released yesterday by CUC.

The new LEAC rate is now $0.29569 per kilowatt-hour, down from $0.32910 per kWh.

The average residential consumer will see a decrease of about $12.50 per month on their bill, according to CUC chief financial officer Charles Warren.

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 element of the bill is the electric base rate.

The MOPS (Mean of Platts Singapore) has been down since May 2012, prompting the tariff cut. CUC checked with its consultant,, to calculate the new LEAC rate.

Acting CUC executive director Alan Fletcher pointed out the importance of having the flexibility to adjust rates based on the what’s happening on the ground.

“We are pleased that we could pass along the lower rates, which are reflective of the changes in the markets. This action shows the importance of CUC having the flexibility to make monthly adjustments in the LEAC to reflect current conditions,” he told Saipan Tribune.

Even without the Commonwealth Public Utilities Commission, CUC can make the necessary changes to its LEAC because the commission’s January ruling allows an automatic adjustment of the LEAC rate, so long as it does not exceed 4.5 percent of the current rate.

Warren said that CUC is closely monitoring its data on a daily basis and assured that it is following all the rules that the utilities commission set up at its January ruling.

Saipan Tribune learned that no filing is needed for the new adjustment and the new rate will be subject to a full review by the utilities commission once it reconvenes.

The new LEAC tariff is composed of the following elements: LEAC fuel and lube oil ($0.27864); volatility element ($0.01254); regulatory and technical support ($0.00123); reconciliation element ($0.00807); and allowance for doubtful accounts ($0.01135).

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