CUC has successfully petitioned the Commonwealth Public Utilities Commission for an increase in the LEAC rate by $0.04, from the previous $0.02812/kwh to $0.24446 per kwh.
Malae said the current LEAC rate is $0.08 per kilowatt-hour higher than the rate in Jan. 2010, $0.05 higher than what it was in Jan. 2009, and $0.08 lower than the rate in Sept. 2008.
“The continuous fluctuation in cost per kilowatt-hour is directly related to the variations in fuel price,” Malae said.
In the new LEAC rate, fuel and lube oil elements represent $0.23033 per kwh; current true-up element, $0.00423 per kwh; price volatility element, $0.00646 per kwh; technical and regulatory support, $0.00343 per kwh; under recovery from October to December 2010, $0.00683 per kwh; and projected under recovery from January to March 2011, $0.02997 per kwh.
Malae said it was in fiscal year 2008 when CUC recorded the highest fuel expenses of $81 million for the last six years since 2005.
He said CUC power plants consume 2 million gallons of fuel per month.
Based on its audited financial statements, CUC spent $381.3 million on fuel from 2005 through 2010.
CUC spent $59.2 million on fuel in 2005, $76 million in 2006, $62.7 million in 2007, $81 million in 2008, $47.7 million in 2009, and $54.8 million in 2010.
Malae said CUC is current with its accounts with Mobil.
“CUC pays Mobil on a cash and carry basis — payment prior to delivery,” he added.
He said the condition of a power engine will determine its efficiency and the volume of fuel consumption.
The most fuel-efficient engines are at Power Plant 1 in Lower Base, he added.
Rota will be receiving more fuel-efficient engines soon, he said.
According to Malae, CUC has several projects underway to improve engine efficiency at Power Plant 1 such as new turbochargers and new cooling systems.
When asked if CUC is implementing austerity measures to reduce its fuel consumption, Malae said they can shut off the engines but the consequence will be power rationing.
“We have not resorted to that option yet,” he added.
