CPUC suspends activity on new rate charge proposals

The CNMI’s utilities regulatory agency yesterday voted in favor of the Commonwealth Utilities Corp.’s request to suspend prehearing activity on proposed rate surcharges meant to recover dire losses from Typhoon Soudelor last year and finance needed capital improvements.

The Commonwealth Public Utilities Commission, at the request of CUC, voted to defer on prehearing activity citing the status of the appointments of the commission’s board.

“What this request means is just to suspend the activity because we are anticipating that the commission will not have a full quorum,” CPUC chair Joseph Guerrero told Saipan Tribune in an interview after the commission meeting. “We need three commissioners to conduct business, make orders and such, because my term is expiring along with [commissioner] Oscar Quitugua’s.

He said CUC’s “argument is that we don’t want to do all this work and then six months later the commission asks them again to update it. It’s like counting things twice.”

“And so it’s reasonable,” he added.

According to Guerrero, his term and Quitugua’s expires on May 30. The third commissioner Dave Guerrero’s term expires in August 2017.

The CPUC chair went on to say even if they are reappointed they would still have to go through Senate and House confirmation and he said that might take about two months. If they don’t get reappointed, he expects the near the same time for new commissioners.

Still, Guerrero disclosed when asked that he’s gotten word that Gov. Ralph DLG Torres will reappoint him. “He has until Monday to put something formal together. But the governor, in my conversations with him, he understands the importance of the commission’s work and the service that we provide to the entities and the oversight of rates and the utilities.”

Yesterday, the regulatory board suspended a prehearing on rate case, number 16-01, which centered on the adoption of two new surcharges on CUC’s electric customers.

One was a “disaster recovery surcharge” intended to reimburse CUC for costs incurred as a result of Typhoon Soudelor, and a capital improvement surcharge to finance needed capital improvements. The surcharges are proposed at $.0145 per kWh and $.0223 kWh, respectively.

The disaster recovery surcharge aims to recover $3 million in net revenue over a 12-month period.

The capital improvements surcharge is designed to recover $2.6 million over a year’s time.

CPUC’s and CUC’s action defer movement on rate cases meant to help a struggling utility that CUC chief financial officer Matt Yaquinto and Economist.com consultants wrote was in continued “severe” and “serious financial trouble,” according to pre-filed testimony on the rates last March.

Yaquinto, who was fired without cause on Wednesday by acting CUC executive director Gary Camacho, wrote in his testimony of the thousands of accounts offline for several months due to the devastating storm and how prior to that CUC’s losses and troubles had been well documented. “Is there any evidence or reason to believe that CUC’s position magically turned around or improved in the last five months? None whatsoever…Still as of today [we] have not reached [revenue] levels before the storm since hundreds of accounts were destroyed.”

He said “revenues are down and expenses are way up,” and also said that the typhoon caused $31 million in damage and counting to CUC’s system.

Guerrero yesterday said the commission’s duty was to always look at rate cases and analyze the merits of the case are.

“Higher rates are not necessarily bad for the public. Sometimes higher rates are justified to cover the costs of increase, costs that are beyond the control, cost of doing business for example,” he said.

Sometimes rates are also required to fund projects, if we need new pipe or new power system or new vehicles or anything that creates power. So rate increases are not necessarily bad, it’s just that it has to be justified,” he added.