A highly anticipated meeting between the Public Services Commission and a consumer justice group challenging the latest Levelized Energy Adjustment Clause rate hike didn’t end with a change in the final numbers.
But Tuesday’s meeting did jumpstart a process that allows for more public access to the data used to inform the PSC’s decisions on increases.
The PSC set the most recent LEAC rate in June, to go into effect on July 1, and at the time allowed any motions for a reconsideration of its decision up to Aug. 19. During Tuesday’s special meeting, PSC chair David Hughes said if no action is taken before that date, any petition is automatically denied by statute, which is what happened to the request recently filed by the V.I. Alliance for Consumer Justice.
However, in response to the group’s call for better transparency, PSC members said they would work to supply the information the group requested while Hughes added that in the future, he would work with the PSC’s director to post on the commission’s website all of the information and data made available to the PSC’s members when it is received. Hughes said he doesn’t believe there is anything – particularly concerning the LEAC filings – that the commission receives that isn’t public, but cautioned that distorting the data when it is made available is also not productive to the general dialogue about reducing the energy costs and rates.
The V.I. Water and Power Authority’s initial electric LEAC petition for the July through December period was for 17.522-cents, representing a 2.58-cent increase over the previous rate of 14.94-cents. At a meeting in June to consider the petition, a back-and-forth between the authority and Georgetown Consulting Group, the commission’s advisor on WAPA matters, revealed a difference of opinion over the fuel rates at the time the petition was filed, with Georgetown saying they were higher than they are now. WAPA officials said that they didn’t object to the electric LEAC being based off lower fuel prices, but explained that the slightly higher rate was used since the authority is not able to factor its deferred fuel balance costs into the request until it provides the PSC with audited financials.
The deferred fuel balance costs were a main sticking point Tuesday for the V.I. Alliance for Consumer Justice, with group spokeswoman Jezellia Sujanani saying that taking it out of the calculations should have resulted in an even lower rate. Seeking to explain more about the commission’s process, Georgetown Consulting principle Larry Gawlik said the PSC has previously determined that the deferred fuel balance – or, what WAPA has not been able to recover in fuel expenses – would not be considered until the authority provides its audited financials and, therefore, was not factored into any of the PSC’s calculations on the most recent LEAC rate, nor any increases made over the past year.
The bulk of the LEAC rate, instead, is based on the price of fuel looking forward and for the latest increase, WAPA met its minimum filing requirements, Gawlik added in response to concerns raised by the Alliance that the PSC lacked the data needed to make an informed decision.
PSC members pointed to its policy about the deferred fuel balance as a protection for the ratepayer, as the authority could be entitled to additional reimbursements should the PSC approve the deferred fuel balance requests if audited financials were to be provided.
“But we haven’t had sufficient information so we have taken that out of the equation completely. That is us acting in the best interest of the ratepayer,” Hughes said, addressing additional concerns from the Alliance about the public’s perception of the PSC being a “rubber stamp” for WAPA.
The PSC also sought to explain the difference between WAPA’s and Georgetown’s fuel projections for the July to December LEAC period, which the Alliance suggested needed further clarity and which Gawlik said is really a matter of timing. WAPA’s petitions are done far in advance, relying on the fuel price data they have at the time, but not the prices in place when the petition is actually considered. When that happens, the PSC adjusts based on a higher or, in this case, lower, rate, Gawlik added.
“Those prices are updated to reflect the best information available at the time, so when we filed our report, it was based on information that more closely aligned with changes in energy prices for the given LEAC period,” Gawlik said. While Alliance members said they understood the rationale, they also contended that despite multiple requests to the commission, they did not receive, nor were they able to look over, the data that Gawlik’s June report was based on.
As Hughes, along with members Pedro Williams and Sen. Genevieve Whitaker, spoke about increasing public access to the information and offering residents more input in the process, others also touched on other opportunities WAPA has to lower its rates. WAPA has made “some serious errors in the past” with its conversion to liquified propane gas and its generator leases, among other things, and what the public can also do is be part of the discussion to make the authority more efficient, said PSC member Andrew Rutnik.
“If we can refocus and get a leased unit in place to replace one of those old units, we can save $5 million a year and that will directly be taken off the rate,” he added.