With the price of oil now hitting more than $100 per barrel, the V.I. Water and Power Authority has petitioned for an increase in Levelized Energy Adjustment Clause (LEAC) rates that will be considered at next week’s Public Services Commission meeting.
The proposed increase will raise by 20 percent — or $40 — the bill of the average residential customer using 500 kilowatt hours per month. If approved, the new surcharge would go into effect April 1.
The current LEAC factor — in effect until the end of the month — was based on fuel projections of $89 per barrel. However, Hovensa’s price earlier this month was $100 per barrel, while the market price is $110 after hitting a high of $116 last week, WAPA Executive Director Hugo Hodge Jr. said in a statement Tuesday.
Hodge said higher prices at the pumps have had residents calling in about a possible jump in LEAC rates.
"We are very concerned about this situation as we observe the dynamics of our territory’s 12-to-18-month lag in the nation’s recession," he said in the recent release. "The coupling effect of signs of recovery on the mainland includes higher fuel costs, which lead to repercussions here in the territory. Unrest in the Middle East also complicates oil pricing and leaves us all the more concerned about what it means to our customers."
WAPA will appear before the Public Services Commission on March 22 to explain its request.
"As ratepayers ourselves, we are extremely mindful of what the cost of energy does to our customers and especially what it can do to our business community," Hodge said. "It is critical that all of us as customers conserve electricity and water as much as possible to combat rising fuel costs."
Hodge said WAPA is trying to conserve by using its new heat recovery steam generator, recently installed at St. Croix’s Richmond Power Plant. While repairs to existing units will also boost efficiency, the authority continues to seek out alternative energy solutions, he added.