V.I. residents will soon see a reduction in their Water and Power Authority electric bill. The Public Services Commission voted Tuesday to reduce the LEAC charge.
The Levelized Energy Adjustment Clause appears on residents’ electric bills and is intended to cover the cost of fuel used by the Water and Power Authority. Since the price of oil skyrocketed, it became a dirty word to most residents. WAPA has scrambled to bring that cost down through solar projects and more efficient generators. Since WAPA has been in such dire financial straits, the PSC has allowed WAPA to overcharge on LEAC recently.
The Public Services Commission consultant, Georgetown’s Jamshed Madan, told the commission that WAPA has been saying it would be able to bring the rate down, but it has never done so. He said, however, that now, for the first time, it looks like it could be brought down because the fuel-efficient Wartsila generators were online and appeared to be able to stay online. Setbacks and delays have plagued the Wartsila project.
Madan recommended that the LEAC be dropped from 22 cents per kilowatt-hour to 15 cents. The commission approved a drop to 17 cents.
WAPA Chief Financial Officer Lorraine Kelly was not pleased; she stated that the rate drop would be a catastrophe for the cash-strapped utility company. She had recommended that the commission leave the rate the same as they did three months earlier.
Commissioner David Hughes stated that because the commission had allowed the utility to retain the higher LEAC rate this year, it had granted the utility $18 million.
In April, the commission heard a recommendation to reduce the electric LEAC to 18 cents, but WAPA won that argument, with officials stating that it had charged customers $139 million less than it should have to cover fuel costs in recent years.
The commission voted to keep the water LEAC at its current rate of $9.53 per thousand gallons. Kelly said recent infrastructure improvements include the installation of approximately 4,000 new water meters. These should improve billing accuracy and reduce water line losses.
With the appointment of Genevieve Whitaker as a hearing examiner, the commission moved forward on a rate investigation, required every five years to evaluate WAPA’s electric and water systems in hopes of improving service and addressing ongoing financial hurdles.
WAPA recently extended its fuel contract for three months with Vitol and has gone out to bid for a longer-term contract. Hughes questioned WAPA officials about ways the PSC can be more involved in the procurement of fuel. Kelly appears to indicate that PSC could not get involved until the contract was already approved. Hughes moved, and it was approved that the PSC investigate ways to increase its involvement in the process. Vitol has threatened to shut off deliveries to the territory on a couple of occasions. Its original contract with WAPA to convert generators to propane suffered delays and a $100 million cost overrun.
Commissioners Pedro Williams, David Hughes, Raymond Williams, Laura Nichols-Samms, and Clement Magras were present at the meeting. An executive session was held to discuss pending legal and administrative matters, but no action was taken.
St. Croix Source
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