PSC cuts LEAC on water, electricity
Published: March 27, 2014
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ST. THOMAS - The V.I. Public Services Commission voted to cut the Levelized Energy Adjustment Clause for both the water and electric utilities Wednesday.
The LEAC is the part of a utility bill that reflects the charge for fuel passed on to the consumer and typically is altered up or down every three months depending on the amount of money the V.I. Water and Power Authority is paying for oil.
WAPA petitioned the Public Services Commission for an increase to the electric side in February, but the commission denied the request and cut the LEAC instead.
The drop in the water LEAC approved by the Public Services Commission was what WAPA had requested in the February petition.
The new LEAC will be assessed to bills going out after April 1.
On the electric side, the LEAC is falling from 41.27 to 40.18 cents per kilowatt hour. For an average residential power bill that uses 400 kilowatt hours a month, the customer will see a drop of about $4.35.
On the water side, the LEAC rate for 1,000 gallons will decrease from $12.10 to $10.85.
Rate financing mechanism
The Public Services Commission also voted to extend the Rate Financing Mechanism Surcharge to support the leased Unit 25 generator on St. Thomas for another year.
In October, the WAPA board approved a $7.8 million lease extension for the temporary unit for another year. The surcharge, which is included in the LEAC, pays for the leasing of the generator.
The surcharge is currently 2.3 cents per kilowatt hour, but only 1.3 cents of that is earmarked for Unit 25, according to WAPA Executive Director Hugo Hodge Jr. The unit had been leased on a temporary basis to give WAPA a chance to overhaul its other units when the plant on St. Thomas was in crisis, Hodge said. Now, officials want to keep the unit while the utility is converting to propane as a fuel source because it can take the load while other units are taken offline.
Hodge said he understands the criticism of "why lease when you can buy?" but urged people to remember what was going on when the utility made the decision to lease Unit 25.
"We were at a point in the plant where we had to ration power, had to have customers come off the grid so we could meet demand," Hodge said.
Going through the purchasing - and financing - process would have taken more time than WAPA had, he said. Leasing Unit 25 allowed for immediate relief. The reason to continue the lease is that the unit is still useful, allowing other units to be taken offline for routine maintenance, according to Hodge.
Currently, Unit 18 is out for major overhauls and soon Unit 22 will be taken offline to be replaced by a new unit the utility will purchase that will burn propane, a cheaper fuel.
The Public Services Commission also approved a fee assessment to WAPA of $120,000 Wednesday.
In other business, TCG Global and Pungitore Energy Development - together known as TCG Energy - made a presentation to the Public Services Commission on Wednesday, although no votes were taken and the matter was pushed to a later date.
The company, which was certified as a small power producer by default, proposed to make energy from tires. It is currently in negotiations with WAPA for a purchase power agreement.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.