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HomeNewsArchivesHigher Fuel Costs Result in Yet Another WAPA Rate Increase

Higher Fuel Costs Result in Yet Another WAPA Rate Increase

Dec. 7, 2004 — V.I. residents will notice another hike in their electric rates this month due to higher fuel costs in November. However, the rate increase will soon be reduced, the V.I. Water and Power Authority predicted Tuesday.
WAPA Executive Director Alberto Bruno-Vega stated in a release that the December increase would take effect in bills being mailed out this week. The authority's new Levelized Energy Adjustment Clause (LEAC) factor is $0.146 per Kwh. The LEAC represents the consumers' share in covering WAPA's cost of purchasing fuel oil from Hovensa.
Utilizing this new factor, monthly electrical bills for residential customers using 500 Kwh will increase by $6.18 or 5.4 percent, according to the release.
Commercial customers using the average 1,200 Kwh will see an overall increase of $14.84 or about 3.9 percent, and large power customers using 30,000 Kwh will experience an increase of $313.26 or a 4.7 percent increase.
Residential water customers using an average of 2,400 gallons per month will also see an increase of 46 cents or 1.1 percent. This is the fourth time that WAPA has increased its LEAC factor since the Public Services Commission in August gave the utility permission to automatically adjust its rates based on the price of oil.
WAPA has advised the PSC that it plans to reduce its LEAC in January, which will result in a $5.22 or 4.3 percent reduction in residential electric bills due to an expected drop in oil costs in January. "WAPA hopes that this positive trend in lower fuel prices can be sustained during the New Year," Bruno-Vega said.
The January preliminary forecast for the delivered price of oil is $47.27 compared to the $50.15 December price. Bruno-Vega said there is a one-month time lag in fuel prices while the inventories, which were purchased at last month's higher prices, are drawn down from Hovensa's stockpile.
"While the forecasts predict a reduction in fuel costs," Bruno-Vega said. "Any Middle East turmoil or other unforeseen event may affect this reduction in the cost of oil."
WAPA reminds its customers they can conserve energy and decrease costs by reducing consumption in homes and businesses and implementing energy-efficient practices including replacing incandescent light bulbs with fluorescent bulbs, installing timers on hot-water heaters or replacing them with solar water heaters and repairing leaky faucets.
Residents are also urged not to plant trees below or near power lines, because such vegetation interferes with the clean transmission of power to homes and businesses.
"WAPA is aggressively working towards reducing its operating costs in several ways: utilizing its waste heat recovery boilers more effectively and attacking reasons for line loss with a program that includes severe penalties for those customers stealing power and water through meter tampering," Bruno-Vega said, adding that the authority was conducting an assessment study of its power plants and is seeking alternative sources of energy.

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