Under the LEAC scheme, which was implemented on Jan. 1 this year, it was anticipated that changes in the power rate will only occur every six months.
But Muna said the power rate will still depend on the fuel price.
If, for example, LEAC sets a base cost of $1.66 per gallon in January while the oil base price on Saipan costs $1.56 per gallon, then CUC will have an “over-recovering account.”
In February, Muna added, if the fuel cost goes up to $1.76 per gallon, the power rate should increase since it is more than what the LEAC sets.
But CUC will not impose a power rate hike because of its “over-recovery” in January, Muna.
However, he said, if there will be successive increases in fuel prices and the saving from the over-recovery can no longer catch up with the new fuel costs, CUC will increase the power rate.
At present, residential customers using less than 500 kilowatt hours pay $0.22989 plus the base rate of $0.016 per kwh for a total of $0.24589 per kwh.
CUC agreed to the proposal made by the Georgetown Consulting Group that the first LEAC will be implemented in a three-month period.
New rates will be set every April 1 and Oct. 1.
Muna said the rate approved by the Public Utilities Commission should help provide CUC with operational and financial stability.
“As we achieve a certain amount of stability, we will revisit the rate structure,” he added.
