The Commonwealth Public Utilities Commission is \u201cunsure\u201d whether it will approve or reject a proposal to tweak the current levelized energy accrued adjustment, or LEAC, rate of the Commonwealth Utilities Corp.<\/p>\n
In yesterday\u2019s meeting, commissioners Viola Alepuyo and Joaquin Manglona opted not to decide on the proposal pending the submission of all necessary records and data from CUC, its consultant, economist.com, and the commission\u2019s own consultant, Georgetown Consulting.<\/p>\n
\u201cThe commission has yet made a determination and refused to decide [on the matter] because we want to make sure records are complete and everybody is given the opportunity,\u201d Alepuyo told Saipan Tribune.<\/p>\n
The commission has set a public hearing on the LEAC issue on Nov. 14; a decision is expected during a Nov. 17 business meeting.<\/p>\n
Georgetown Consulting had already recommended the adjustment, saying there\u2019s a need to do so because of \u201cover-recoveries\u201d made by the utilities agency, when it charged customers more than the actual amount it needed to \u201crecover\u201d the cost of fuel.<\/p>\n
Alepuyo pointed out, though, that not all recommendations of its consultant gets the commission\u2019s approval.<\/p>\n
\u201cWe don\u2019t follow all of Georgetown\u2019s recommendations because ultimately, our decision is based on what is fair, just, and reasonable for the customers,\u201d she said.<\/p>\n
Besides the LEAC issue, the commission will also decide at its Nov. 17 meeting other CUC matters such as CUC\u2019s loan application to the U.S. Department of Agriculture, audit reports and its findings, the Telesource contract for Tinian, net metering, and alternative energy.<\/p>\n
Georgetown earlier said that CUC\u2019s LEAC is unquestionably higher than required and should be reduced at the earliest date possible.<\/p>\n
For instance, the current LEAC rate is set at an effective fuel price of $3.55 per gallon (inclusive of the volatility element). However, the current price of fuel oil and the October 2011 gasoil futures are priced at less than $2.90 per gallon\u2014a difference of $0.65 per gallon or almost 20 percent. It believes that there was an over-recovery situation between May 2010 and November 2010.<\/p>\n
CUC deputy executive director Alan Fletcher disputes this, saying there is no evidence of over-recovery.<\/p>\n
He insists that the analysis indicating an “over-recovery” of LEAC revenues is based on incorrect and unsupported assumptions.<\/p>\n
The LEAC rate is a component of the power 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.<\/p>\n","protected":false},"excerpt":{"rendered":"
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