The Commonwealth Utilities Corp. is currently studying a fuel adjustment charge for its electricity rates.<\/p>\n
CUC acting comptroller Ed Williams said this even as he reported to the CUC board Thursday that CUC\u2019s budget for fuel will overshoot by $7 to $8 million this year due to increases in fuel price. <\/p>\n
CUC had budgeted $31 million for fuel expenses for fiscal year 2004. <\/p>\n
Earlier, Williams projected $35 million to $36 million in expenditures for fuel, or about $5 million above its budget. But last week, he said he has revised his projection upward to the range of $38 million to $39 million.<\/p>\n
\u201cThis large difference cannot be set-off entirely by reprogramming funds within the budget,\u201d said Williams.<\/p>\n
As a result, the utility firm is now looking at the possible implementation of rate adjustments.<\/p>\n
\u201cI\u2019m requested that I gather information pertaining to the development and implementation of a fuel adjustment charge for possible inclusion as an add-on to CUC\u2019s rates for electricity,\u201d said Williams.<\/p>\n
He said such a plan would be ready early this week.<\/p>\n
He reported that operations during the first seven months were normal except for the increase in the cost of diesel, which the CUC uses as fuel for its power plants. <\/p>\n
Expenses for fuel rose by about $2.5 million this year compared with the same period last year\u2014an increase of 13 percent over last year\u2019s expenses.<\/p>\n
He said that fuel price per gallon remains high. In March, the price was $1.02 per gallon and in April, it rose to $1.05.<\/p>\n
Last week, he said that based on the latest Platts Oil Gram price report, the price of fuel bought by CUC cost $1.15 per gallon. The report is the source document for determining the price of fuel each month per CUC\u2019s fuel supply contract with Mobil Marianas.<\/p>\n
Williams said that based on the latest news, the price of fuel will remain at $1 or more per gallon for at least the next several months.<\/p>\n
In early May, the CUC management floated the idea of imposing a fuel surcharge fee of up to $0.035 per kilowatt due to rising fuel prices.<\/p>\n
CUC executive director Lorraine A. Babauta said the fee would permit CUC \u201cto recover increases and to pass on decreases in fuel costs.\u201d<\/p>\n
This is done through an adjustment in the customer\u2019s bill if the price of fuel varies from a specific unit cost, she said.<\/p>\n
Generally, the fuel surcharge fee is a charge or credit that is applied to each kilowatt-hour of electricity sold, which is computed each month.<\/p>\n
CUC cited that Title 4 of the Commonwealth Code, Section 8143 provides that the CUC board shall determine whether to impose a fuel surcharge fee of up to $.0.035 per kilowatt for all consumers of electricity.<\/p>\n
The board has not approved this fee yet.<\/p>\n","protected":false},"excerpt":{"rendered":"
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