Aug. 26, 2004 – The Water and Power Authority will increase the fuel surcharge rate on electric bills by 5.9 percent for residential customers, 5.1 percent for commercial users and 6.5 percent for large power users on Sept. 1. The surcharge rate for water bills also will rise.
WAPA officials said in a release issued Thursday that they have formally advised the Public Services Commission of the planned increases in the levelized energy adjustment clause surcharge, which is tied to the price the utility must pay for oil.
The PSC on Aug. 9 authorized WAPA to adjust the LEAC rate automatically for the next year any time the cost of fuel the authority purchases from Hovensa varies by more than $1.75 per barrel from the projected price.
Hovensa's price to WAPA has risen from $31 a barrel in August 2003 to $40.11 at present, the release stated, adding: "This increase has been so dramatic that the authority did not find comfort in passing on the actual cost to its ratepayers."
Until now, the PSC has been reviewing WAPA requests for changes in the surcharge rate every six months. Because prices have risen so steeply, the utility has underbilled customers by $17 million for electricity over the last two years, according to the authority.
In order to recoup those fuel costs without a huge hike in the LEAC surcharge, the authority is spreading the $17 million under-recovery over a 36-month period in equal monthly installments which began in January.
WAPA's Sept. 1 increase in the surcharge to 11.6 cents per kilowatt-hour from the current 10.5 cents is aimed at recouping over the three years "the overall amount of money owed to WAPA from the underbilling and the existing higher price of fuel," the release said.
According to WAPA, "There should be a more gradual over- or under-recovery period as the new LEAC process performs reconciliations on a more frequent basis which will help avoid spiking adjustments."
The Sept. 1 increase in the fuel surcharge on electric bills will mean an increase to $101.35 from $99.50 for a residential customer using 500 kilowatt hours of power.
There also will be an increase Sept. 1 in the surcharge on water bills. The rate will go to $1.42 per thousand gallons from the current 66 cents per thousand gallons. A residential customer using 2,400 gallons of water monthly will see an increase to $41.97 from the current $40.14. This amounts to a 4.6 percent monthly increase.
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