Incentive rate for large commercial customers OK’d

After nearly two years, the Commonwealth Public Utilities Commission approved Friday an experimental rate tariff that is intended to lure large commercial customers to hook up to the Commonwealth Utilities Corp. grid.

CPUC chair Joseph Guerrero approved the order that will allow CUC to charge large customers with an experimental—and cheaper—rate for four years.

The new charge was among the rate petitions CUC filed with the CPUC in July last year; it was supposed to be implemented in October 2013. The proposal was snagged by delays in succeeding months and was eventually withdrawn by CUC’s new board on April 14, 2014.

Consultants for both CPUC and CUC approved a modified incentive rate proposal on May 28, 2014, after long discussions on the past standby charge for commercial customers.

Both CPUC and CUC agreed to come up with a contract that would help large commercial customers experiment before officially getting into CUC’s grid.

The proposed contract was given to CPUC on Aug. 2 and was reviewed by Georgetown Consulting Group. CUC executive director Alan Fletcher told Saipan Tribune that they met on Sept. 2 to discuss the draft contract. It was then tabled on Sept. 4 for initial comments from large commercial customers. Comments were supposed to be submitted on or before Sept. 23.

During the comment period, DFS Saipan submitted its comments to CPUC, which was then built into the contract with the support of CUC and CUC’s consultant, Georgetown Consulting Group.

Contract for commercial customers

The experimental tariff rider incentive rate is now available to large commercial customers locating, expanding, or returning their entire load to CUC’s grid and must remain as full CUC customers for a four-year term.

The contract is also open to new participants for a window of four months from the time it is approved.

Commercial customers are qualified for the new rate if they have a generation capacity of 400kW or greater and generating 90 percent or more of their annual electric needs; commercial customers that expand their existing facility that results in an increase in load of 200kW or greater or expand their hotel by 75 rooms or greater; or new commercial customers with electric generation capacity of 400kW or greater.

The four-year incentive rate will provide a reduction of 8.3 cents per kWh from CUC’s commercial electric base rate from the date the customer starts purchasing electricity.

The contract’s terms of agreement points out that it has to remain four years following the day it was given. One proviso added to the terms of agreement—in response to the comment from DFS—is that if CUC is unable to supply the entire load of the island’s applicants, applicants will have the right to terminate the contract.

CUC’s Fletcher said the purpose of the contract is to offer and attract self-generating businesses back into CUC’s system because CUC has a greater reliability today and good operating practices.

“We need the baseload back to be in a better financial situation,” he said.