CUC wants LEAC increased from the current factor of $0.20147 per kwh to $0.27634 per kwh effective June 1.
This means, CUC said, that a residential ratepayer using 1,000 kwh per month will see an overall increase of his electric bill by $74.87 per month.
“The increase in the LEAC rate is a reflection of the fact that world oil prices over the course of the past eight months have risen sharply and with CUC’s total reliance on fuel oil it is and remains totally captive to such increases in world oil prices,” CUC stated in its report to the Commonwealth Public Utilities Commission.
CUC’s recommendation was made in collaboration with CPUC’s regulatory consultant, Georgetown Consulting Group.
LEAC was established to enable CUC to “recover its prudent fuel and related expenses under regulatory oversight.”
CUC said the actual price of fuel oil during the period Oct. 1, 2009 to May 31, 2010 was greater than the price forecast for that period.
Moreover, the forward price of fuel oil from June 1 to Sept. 30, 2010 is substantially greater than the forward pricing used in the current period, CUC added.
CUC admitted that it was unable to shift production to alternative fueled generation due to its total dependency on fuel oil for the production of electricity.
CUC said its LEAC rate analysis and report from June 1 to Sept. 30, 2010 was prepared in accordance with the minimum filing requirements approved by CPUC.
The recommended $0.27634 LEAC rate is comprised of the following elements:
• $0.25740 per kwh for fuel and lube oil;
• $0.01287 per kwh for fuel oil pricing volatility element; and
• $0.00607 per kwh for technical and regulatory support.
CUC’s proposed rate hike has to be approved by the Commonwealth Public Utilities Commission.
