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WAPA Announces LEAC Changes

Jan. 10, 2006 – Virgin Islands Water and Power Authority customers will note a decrease in the Levelized Energy Adjustment Clause Factor in their electric billing statements effective Jan. 1. The Public Services Commission has approved the electric LEAC at $0.163794 per kilowatt hour (kWh) down from the November and December 2005 factor of $0.171267 per kilowatt hour (kWh). (See WAPA Electric Rates to Dip; Water Will Increase.)
The average residential customer using 500 kilowatts a month will expect to pay $125.53 in January, a decrease of $3.74 or 2.9 percent in the overall monthly billing, a release from the authority said. Commercial and large power users averaging 1,200 and 30,000 kWh monthly, respectively, will see decreases in their average monthly billings by $8.96 or 2.6 percent, and $224.12 or 3.1 percent.
The reduced electric LEAC factor is for the period of Jan. 1 through June 30, 2006, and will be the basis for the next six-month period, according to the release. The new LEAC could be changed by the automatic LEAC adjustment factor, approved by the PSC in August 2004, if the actual price of fuel varies up or down from the forecasted price by more than $1.75 per barrel this month. (See
Fuel Costs Driving Electric and Water Bills Up Sept. 1.)
The PSC will consider WAPA's petition to extend the automatic LEAC, which expired in October and was extended through December, when it meets later this month. The automatic LEAC has allowed WAPA to only partially recoup its fuel expenses of previous years resulting from the fluctuating cost of fuel that WAPA must pay to HOVENSA.
The total under-recovery of LEAC for both the water and electric systems now stands at $24.8 million, Cassandra Dunn, WAPA spokeswoman, said in the release.
This under- recovery is creating serious problems for WAPA in providing proper maintenance and repair to existing facilities and preventing much-needed improvements to its electric and water infrastructure, Dunn wrote.
WAPA customers will notice an increase in the water LEAC to $4.67 per thousand gallons (kgal) from the current factor of $4.01/kgal. The monthly billing for a typical residential customer using 2,400 gallons will be $49.76, representing an increase of $1.58 or 3.3 percent.
Water LEAC has increased to allow for payment of prior fuel costs under-recovered from water customers in previous calculations. The under-recovery will be spread over a two-year period.
According to Alberto Bruno-Vega, WAPA executive director, the utility will continue to pass any savings in the LEAC on to its customers. However, he cautioned that the new LEAC is based on anticipated fuel oil delivered at $56.53 a barrel, and fuel oil prices have again begun to climb, reaching almost $63 per barrel today. "The authority continues to implement cost-saving measures, and we urge our customers to do likewise," Bruno-Vega is quoted as saying. "Any momentary reduction in LEAC should motivate our customers to pursue even more aggressively energy conservation measures," he said. "Meanwhile, our technical team is meeting almost daily to meticulously evaluate proposals from the three small power producers seeking to supply alternative or renewable energy to WAPA. WAPA's Governing Board will review recommendations from WAPA's technical team later this month and submit the selected proposal, if any, to the Public Services Commission for review and final approval in February," Bruno-Vega said.

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