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WAPA Pushed to Meet Standards for Energy Waste, Rates

Nov. 20, 2006 — The Water and Power Authority's continued failure to meet certain benchmarks set up to reduce line losses will have a detrimental impact on ratepayers territorywide, consultants to the Public Services Commission said during a board meeting Monday.
The need to reduce WAPA's line losses — the energy waste resulting from transmission across power lines, plus incidences of theft — has been a consistent topic at PSC meetings. According to PSC technical consultant Larry Gawlick, it's one of the most immediate ways to reduce rates for consumers.
Earlier this year, the PSC voted to disallow WAPA from collecting LEAC (Levelized Energy Adjustment Clause) charges on its line losses, leaving $3.1 million in unrecovered fuel costs. WAPA appealed that decision, and in September the PSC voted to consider WAPA's petition (See "PSC to Reconsider WAPA Petition Concerning Line Losses.")
On Monday, the PSC went a step further and gave WAPA the opportunity to recoup the $3.1 million through the LEAC if the utility is able to implement a line-loss reduction program, and meet a new set of benchmarks by 2008.
The first set of benchmarks, set up in April 2005, required the authority to reduce its line losses by a certain percentage over an 18-month period or face disallowance. When WAPA failed to meet the 18-month goal during the 2006 fiscal year, the disallowance went into effect, amounting to approximately $3.1 million in unrecovered costs.
Gawlick, representing Georgetown Consulting Group, said Monday that if left unchecked, WAPA's continued failure to meet the benchmarks would amount to $6 million worth of unrecovered costs in the 2007 fiscal year.
As a solution, Gawlick said Georgetown and WAPA had "been meeting consistently" over the past three weeks, and have agreed to a stipulation that would allow the utility to recoup the $3.1 million if certain benchmarks are met by 2008.
In return, WAPA would withdraw the petition asking for the PSC to reconsider the disallowance and provide the commission with monthly status reports on the implementation of a line-loss program.
"The line-loss situation cannot be allowed to continue," Gawlick said, adding that Georgetown would "not normally" recommend "using LEAC ratepayers to create funds."
"We don't have a lot of options here," Gawlick said. "Other than the heat-recovery steam generator, there aren't a lot of things that will have an impact on WAPA's cash-flow situation. This is about the best we can come up with."
With a line-loss system in place, savings to both the utility and the ratepayer could amount to $6 million a year, consultants said.
While WAPA representatives said that some efforts are already underway to reduce line losses, PSC board members expressed concerns about allowing WAPA to recoup the $3.1 million after failing to meet the first set of benchmarks.
"If we disallow this penalty, then the consumers have to pay," PSC board member Joseph Boschulte said. "This doesn't hold WAPA accountable for not meeting the standards it agreed upon with the commission. You can't have it both ways."
Despite concerns, however, board members unanimously voted to approve the stipulation.
"We want this to be more than just words on paper, however," said PSC board member Donald "Ducks" Cole, after the vote was taken. "We want WAPA to stay viable, but remember that we want to protect the consumer, as well."
Present during Monday's meeting were board members Boschulte, Verne C. David, Cole, M. Thomas Jackson, Alecia Wells and Raymond Williams. Board member Sirri Hamad was absent.
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