Residential customers of the Commonwealth Utilities Corp. will pay lower electricity bills starting this month due to the reduction of the fuel adjustment charge effective July 1, 2017.
CUC was prompted to adjust its fuel adjustment charge after Mobil Oil Mariana Islands notified it that there has been a decrease in average fuel prices.
As a result, the FAC rate of $0.15330 per kilowatt-hour will go down to $0.140605 per kWh.
That means residential customers who use 500 kWh of power per month will save about $3.63 in their monthly billing.
A resident, Merle Costelo-Hudkins, said, “This is very good and I will be able to use the money saved for other purposes.”
CUC is allowed to adjust its FAC—its fuel adjustment charge pass-through rate previously known as the levelized energy adjustment clause rates—pursuant to a previous order by the Commonwealth Public Utilities Commission to reflect any changes in the price of fuel.
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.
CUC first instituted the LEAC in 2009 to recover fuel and fuel related costs, a system also used by power providers in Guam and the Virgin Islands. In May 2015, CPUC authorized CUC to change the name of LEAC to FAC to provide customers with a more accurate description of the rate.
The FAC is used to purchase fuel and serve 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.