CUC increases fuel charge effective Jan. 1, 2017

Effective Jan. 1, 2017, the Commonwealth Utilities Corp. will increase its fuel adjustment charge from $0.14323 per kilowatt-hour to $0.15512 per kWh. This is.05 higher than what it previously was before its reduction back on Dec. 1 this year.

That means residential customers who use 500 kWh of power per month will pay about $5.94 more in their monthly billing.

Previously known as the Levelized Energy Adjustment Clause, the increase is mainly due to a rise in the average fuel prices.

The fuel adjustment charge, or FAC, is a change in cost of power to compensate for increases or decreases, usually unanticipated, in the price of energy. It serves as one of the two components that make up a CUC power bill. The second rate component is the electric base rate, which is used to fund operations, projects, and debt servicing.

CUC first instituted LEAC in 2009 to recover fuel and fuel related costs, a system also used in Guam and the U.S. Virgin Islands. In May 2015, the Commonwealth Public Utilities Commission authorized CUC to change the name of LEAC to FAC to provide customers a more accurate description of the rate.

CPUC granted CUC the ability to adjust the FAC rate based on the price of oil. Adjustments are made when the Mean of Platts Singapore monthly pricing equals or exceeds 4.5 percent of the average per gallon cost of fuel used in the calculation of the FAC rate.

CPUC conducts periodic reviews of CUC’s fuel charges to ensure that consumers pay no more or less than the actual cost of fuel. Although there is a slight increase in the FAC rate, CNMI consumers have experienced a decline in the FAC since mid-2014.

MOPS is the average of a set of Singapore-based oil product price assessments published by Platts, a global energy, petrochemicals, metals and agriculture information provider.

Michael T. Santos | Reporter

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