CPUC clarifies position on legislatively enacted rates

The Commonwealth Public Utilities Commission has clarified its position on the enforcement of legislatively enacted rates, saying that for the reduced water and wastewater rates for public schools to be implemented by the utilities corporation, a petition must be filed by a regulated entity for the commission to review and decide on.

CPUC chair Joseph C. Guerrero disclosed this to CUC executive director Alan W. Fletcher after the latter sought the commission’s opinion on the enforcement of Public Law 18-19, which mandates CUC to charge PSS with the commercial rate for water and wastewater.

P.L. 18-19 was signed into law on Sept. 24, 2013, but it has yet to be implemented.

“Generally, the commission reviews rates in a rate proceeding initiated by a regulated entity. Legislative rates are not exempt from this approach. Accordingly, when the Legislature enacts a rate, the regulated entity should initiate a rate-setting proceeding with the commission,” said Guerrero in his letter to CUC, adding that the regulated entity is free to support, oppose, or refrain from taking any position on the legislative rate.

Guerrero said the commission will review the rate using the same criteria employed in all rate-setting proceedings and will either approve, disapprove, or modify the legislative rate.

If a regulated entity does not ask for a rate setting proceeding to review a legislative rate, then the CPUC can possibly review the rate in the context of a customer complaint if a customer lodges such a complaint with the commission, Guerrero said.

During last week’s CUC meeting, board chair David J. Sablan endorsed seeking the Office of Attorney General’s opinion on the matter.

If the CPUC’s opinion is found correct, CUC would then request either the Public School System or the consumer advocate of the CNMI Attorney General’s Office to file the necessary petition with CPUC.

Filing petitions require paying for regulatory expenses and consultant fees and the petitioner will shoulder these costs.

PSS has been paying a significant amount for its water and wastewater consumption. In fiscal year 2012 alone, the system paid about $1.5 million just for water and wastewater use.

Prior to the enactment of P.L. 18-19, PSS was charged a government rate for its water and wastewater use. The law changed this to commercial rate, which reduced the charges for water by 98.4 percent and for wastewater by 95.6 percent.