PSC lowers water, electricity LEAC rates

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ST. THOMAS - Utility bills should be a little cheaper for the next few months after the V.I. Public Services Commission on Monday night approved rate decreases to the V.I. Water and Power Authority's water and electricity LEACs.

The LEAC - Levelized Energy Adjustment Clause - is the portion of the utility bill that reflects the charge for fuel passed on to the consumer and typically is altered every three months depending on the cost of fuel oil for WAPA's generators.

On Monday, the Public Services Commission approved WAPA's petition to drop the water LEAC from $10.85 to $9.12 per 1,000 gallons of water, which is the average monthly amount of a typical residential customer. The rate decrease will lead to a savings of about $1.73 per month.

On the electric side, the LEAC will decrease from 40.18 cents per kilowatt hour to about 40.05 cents per kilowatt hour, which will translate to a 53 cent reduction in the average monthly power bill of 400 kilowatts.

The new LEAC rates will begin July 1 and will apply through Sept. 1, when WAPA can request that the commission revisit the rates again.

WAPA determined that the LEACs should decrease because of the savings generated by WAPA's new reverse osmosis plant, according to WAPA Pricing and Rates Manager Akeyla Clarke.

However, LEAC rates may see an increase in the future if WAPA is successful in petitioning for an additional cost to be tacked onto the LEAC for deferred fuel costs.

The Public Services Commission approved a petition by WAPA on Monday that will allow the utility to return to the commission and again ask for assistance in paying for what Hodge estimated was about $2.2 million annually in interest on the unfinanced portion of $44 million in borrowed funding.

The amount is the total cumulative amount that WAPA has in deferred fuel costs, or the amount of money that it underestimated it would spend on fuel oil to power its generators.

While the bulk of the total amount is financed by a variety of sources, the remaining $6.7 million is costing them interest. However, the Public Services Commission's legal counsel, Boyd Sprehn, said that the amount is closer to $240,000, not the $2.2 million figure provided by WAPA.

WAPA also pleaded with the commission to give it more time to review numbers on WAPA's water line loss, or the amount of water that is not sold but still is produced at a cost to the utility.

The current numbers that WAPA provided were assumed to be faulty because St. Thomas' water line loss was estimated to be about 15 percent of production, which is on the high side of the average loss nationwide. In the states, the average is between 6 percent and 16 percent.

On St. Croix, which typically reports a loss of about 30 percent, the water line losses have been increasing. That district reported a 40 percent loss, which was startlingly high, according to WAPA.

The utility requested more time to review its numbers, a request that the Public Services Commission approved.

- Contact Jenny Kane at 714-9102 or email

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