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PUC consultants begin analysis of power rates
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Posted on Nov 13 2008
Consultants hired by the Public Utilities Commission are preparing to return to the United States, where they will use data from the Commonwealth Utilities Corp. to prepare a rate study and make recommendations on setting CUC’s power rates, said PUC vice chair Kyle Calabrese.
The PUC board members will accept, reject or modify the Georgetown Consulting Group’s recommendation, he added.
PUC must review and set utility rates before the Dec. 31, 2008, deadline set by law. If the PUC fails to meet this deadline, CUC will be forced to reduce power rates down to 17 cents per kWh—a prospect that will make it impossible for CUC to pay for fuel supply and maintenance of its engines and to pay its independent power producers.
The consultants were on island for a week to meet with CUC officials, receive documents and data, and tour CUC’s sites.
“We’re pretty pleased they’re here and working,” Calabrese said about the consultants. “Everything seems to be going relatively smoothly.”
The consultants are “working in a more compressed timeframe than they might otherwise prefer, “ but it will not compromise their final recommendation, he added.
The PUC is working closely with CUC in the process, but it will ultimately be up to the commission to set the rates, Calabrese said.
“At the end of the day, Georgetown works with the PUC, and we will make our decisions based on the information and materials and recommendations they provide to us, their client,” he said. “So it’s collaborative in the sense that CUC doesn’t have their own independent consulting firm involved in this, which is fine. I don’t think they necessarily need one. But decisions PUC ultimately make will be based on what we feel is necessary for the Commonwealth and CUC to survive financially and operationally as they should.”
