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WAPA Bills to Decrease 7 Percent Beginning in October

Sept. 21, 2006 — The V.I. Water and Power Authority announced there will be a significant decrease in customer electric and water bills effective Oct. 1, 2006, according to a release issued Thursday.
The release goes on to state: "Customers will see an overall 7 percent decrease in the total monthly billing primarily as the result of a reduction in the electric LEAC surcharge.
The LEAC, also known as the Levelized Energy Adjustment Clause factor, is the fee WAPA collects from its customers to pay Hovensa for fuel consumption.
According to Alberto Bruno-Vega, executive director, 'WAPA will be able to benefit from the reduction in the fuel oil market over the past few weeks and intends to immediately pass the savings on to our customers.'
The new electric LEAC is $.215619 per kilowatt hour (kWh) down from the August and September factor of $0.237047."
According to the release, "Bruno-Vega advised the Public Services Commission (PSC) in writing on Thursday of the proposed reduction. Bruno-Vega wrote to Alecia Wells, PSC Chair, ' the recent drop in fuel prices is significant and the Authority, cognizant of the effects the volatility within the oil market has had on our customers of late, wishes to pass these savings through to our customers as expeditiously as possible.'"
The release also noted that the current decline in fuel prices, which occurred in September, will not be felt by the Authority until October due to the lag in pricing caused by shipping and inventory management at Hovensa. However, WAPA estimates a reduction of $2.2 million per month from Oct. 1 to Dec. 31 based on projections from WAPA's consultants, Risked Revenue.
WAPA has forecasted fuel costs of $65.93 per barrel in October increasing to $67.13 per barrel in December–substantially lower than Hovensa's September price of $76.96 per barrel.
The monthly billing for residential customers using an average 500 kWh will decrease by 6.7 percent or $10.72 from $161.15 to $150.44. Bills for commercial customers using 1200 kWh will decrease by 6.1 percent or $25.71; and the bills for large power customers using an average 30,000 kWh will decrease by $7.1 percent or $642.84.
The water LEAC will decrease by 1.3% or $0.72 for the average residential monthly consumption of 2,400 gallons.
However, Bruno-Vega warned customers not to become complacent because of falling fuel prices and encouraged them to continue implementing energy conservation measures.
"This decrease in fuel costs may only be temporary," he said. "The fuel oil market remains erratic and we must stay vigilant in order to keep energy costs down."
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