Ayuyu, Ind.-Rota and chairman of the Senate Committee on Public Utilities, Transportation and Communications, in an interview said CUC told him it failed to reduce the electricity rate in June for two reasons.
He quoted CUC Executive Director Abe Malae as telling him in a letter that the “complexities” in calculating the Levelized Energy Adjustment Clause, or LEAC, rate delayed action in response to the fuel price rollback.
The LEAC intends to reimburse CUC for the fuel oil it buys to operate its power plants. When the oil price goes up, the LEAC goes up, too and when oil price goes down, it is supposed to also go down.
Ayuyu said according to CUC, the LEAC recalculation of the electricity rate in response to an oil price change takes six months.
CUC’s second reason, Ayuyu said, is the lack of quorum in the Commonwealth Public Utilities Commission which decides on the changes in electricity rate.
Earlier this year, CPUC issued an order for CUC to reduce the power rate when gas prices went down.
Ayuyu said that although two months have passed since the gas price rollback, CUC should still reduce its power rate.
“The electricity rate cut when fuel cost was reduced should have taken place that time,” he said.
Ayuyu said he will try to work with CUC to look into offsetting the electricity rate for consumers.
“Our people deserve to get fair charges for what they use,” he said.
Senate Floor Leader Pete P. Reyes, R-Saipan, introduced a bill on Wednesday seeking to do away with LEAC and replace it with a rate adjustment system called Monthly Fuel Adjustment Clause.
Senate Bill 17-84 provides a method through which electricity rate will be calculated on the first day of every month using a new spreadsheet model.
Ayuyu said the monthly calculation is less time consuming and is less complex as it will immediately reflect electricity rate changes on a monthly basis.
