But without any challenge, the PUC says it is open to revising those rates downward and adjusting the formula if there is some dramatic improvement in the price of fuel that drives down the cost of power.
Dr. Gilbert Canton,
"What we're saying is that if the cost of power, oil prices start going down, more rains comes where we could have more hydropower--those kinds of things start to happen and the price starts dropping, then we will take the difference in that money and apply it strictly to the rate stabilization account to try to accelerate amortization of that, to get rid of that account. As soon as that account is finished, then all that money that is going to that rate stabilization account, to pay off that rate stabilization account, can be applied to a reduction in rates. It is projected, we don't know. What we are projecting right now is that the rate stabilization account will be paid off in 2009 and if everything works out well, then that will be the time that the monies that are being used to pay that off can be applied to a rate reduction. Again if the cost of power comes down quicker than we anticipate, then there's a opportunity for a rate adjustment or rate reduction to be coming even earlier if that occurs."
Of the present increase, 12% goes to settle the rate stabilization account over the next four years, and 88% goes to pay for an increase in the cost of power, which is projected based on what the PUC expects will be in a new power purchase agreement with Mexico's CFE which will not be finalized until August.
