In a move which should lead to reduced electricity costs, Caribbean Utilities Company announced Friday that it expected fuel factors in this month’s electric bills to drop by more than 20 per cent from November.
The fuel factor is what CUC charges to recoup the costs of gasoline used to produce electricity. It shows up on monthly bills as a ‘fuel charge.’
In November, fuel factors charged to CUC customers were CI $0.22 per kilowatt hour. This month, the company has recommended dropping that charge to ‘in the range of’ CI $0.17 per kilowatt hour.
Fuel charges on CUC bills reached a high this year of CI $0.27 per kilowatt hour in September.
Even though petrol prices had begun to drop from a July high of US $147 a barrel, reductions in CUC customer charges lagged behind since the electricity provider purchases its fuel two months in advance. So in September, customers were being charged based on July fuel costs.
Depending on how much electricity a household uses reduced fuel factors could lead to significant savings on monthly bills.
An electricity customer who used 2,000 kilowatt hours of electricity in November would have paid $440 on the ‘fuel charges’ portion of the bill. The same customer, using the exact same amount of electricity in December would pay $340 for fuel charges.
Fuel factors vary month-to-month and are subject to world-wide market fluctuations.
‘I am pleased to see that the cost of fuel has been coming down and customers are seeing lower bills,’ CUC President and CEO Richard Hew said.
The fuel factor charged in December, if approved by the Electricity Regulatory Authority, would be the lowest the islands have seen all year. Fuel charges in the first quarter of 2008 stayed steady at CI $0.18 per kilowatt hour. In the third quarter, they averaged CI $0.26 per kilowatt hour.