May’s FAC drops due to falling fuel prices—CUC

Posted on May 13 2020


The Fuel Adjustment Charge for the month of May went down to $0.08323 per kilowatt-hour effective May 11, 2020.

In an advisory yesterday, the Commonwealth Utilities Corp. said that Mobil Oil Mariana Islands, Inc. notified it yesterday that there has been a decrease in the average international fuel prices that will affect the FAC. As a result, the current FAC rate of $0.11885 per kWh has been decreased to $0.08323 per kWh.

The FAC is one of two components that make up the CUC electric kWh rate, which is used to purchase fuel. The second component is the CUC base rate, which is used to fund operations, projects, and debt service. This base rate has not been increased since April 17, 2014.

CUC is required, pursuant to an order previously issued by the Commonwealth Public Utilities Commission, to adjust (up or down) the FAC pass-through rate when the Mean of Platts Singapore monthly pricing equals or exceeds a 4.5% differential of the average per gallon cost of fuel used in the calculation of the current FAC rate.

CUC first instituted the levelized energy adjustment clause, or LEAC, in 2009 to recover fuel and fuel related costs, a system also used by power providers in Guam and the U.S. Virgin Islands. In May 2015, the CPUC authorized CUC to change the name of LEAC to FAC to provide customers a more accurate description of the electric rate.

Although the FAC rate has been decreased, CUC encourages its consumers to practice energy conservation. (PR)

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