These two new components are being implemented by the Public Utilities Regulatory Commission (PURC), which has the authority under the Electricity Act to determine the electricity tariff-setting methodology.
The first change, the Renewable Energy (RE) Charge was implemented on 1 October 2023. It reflects the impact of electricity supplied to all customers from renewable energy sources in the same way that the impact of fossil fuel generation is shown as the Fuel Charge.
Think about it as Grenlec supplying energy from two sources to all customers. A portion is supplied by the traditional diesel engines (billed as the fuel charge) and the remaining portion is supplied by RE sources (billed as the RE charge).
The second change, the Fuel Adjustment Clause (FAC) will take effect on 1 November 2023. The fuel adjustment clause is a mechanism designed to pass on any variations between Grenlec’s actual fuel costs and the amount customers were charged for fuel in a timely manner. This difference between the amount Grenlec pays for fuel and the amount customers are charged results from the 3-month average used to calculate the customer fuel charge.
In practical terms, when world fuel prices are rising, the actual fuel costs paid by Grenlec are higher than what customers are charged and the FAC is used to recover the difference from customers in the next billing period. Conversely, when world fuel prices are falling, the actual fuel costs paid by Grenlec are lower than what customers are charged and the FAC is used to credit the difference back to customers in the next billing period.
While the implementation of the FAC has benefits for both customers and Grenlec, customers are asked to note that the change introduces the possibility of sharp upward or downward movements in the customer fuel charge from month to month.
The renewable energy charge and fuel adjustment clause are part of the Interim Electricity Tariff, which was published in the Gazette 1 September 2023.
The two new components, which apply to all customers, will be shown in the Summary of Charges section in the left column of the electricity bill.