‘CPUC has no power to question validity of EO’

The Commonwealth Public Utilities Commission does not have power to consider or question the validity of the executive order that approved the new fuel contract between the Commonwealth Utilities Corp. and Mobil Oil Marianas.

CUC counsel Deborah Fisher told the regulatory body in a June 25 filing that if the commission desires a determination of whether a particular EO is valid, then it should go to the CNMI courts to obtain an answer.

The CPUC’s duties and authority are specifically cited under 4 CMC 8411(a) and these include: to regulate rates, fares, fees, charges, services, rules, conditions of service, and all other matters pertaining to the formation, operation and direction of a regulated entity. Additionally, CPUC may investigate and examine rates and charges. The provision provides too that the commission may promulgate other orders that are “necessary and appropriate for the exercise of its regulatory and enforcement powers.”

Fisher said that questioning an EO’s validity is clearly excluded from the commission’s purview.

“None of the enumerated powers give or could give the commission the power of the judicial branch to decide whether an EO is valid. Accordingly, this cannot be a matter to consider as part of a regulatory process. There is no statutory basis for the commission to put on its agenda for an upcoming session the question of whether an EO executed by the governor is valid for the purpose of bootstrapping in the issue of whether CUC’s fuel supply contract is a valid contract,” said Fisher.

In the June 13 report of CPUC hearing examiner Harry Boertzel, CPUC determined that the fuel contract is invalid. This was based on the opinion issued by the commission counsel, which was also provided to the governor.

Boertzel also said that CUC is violating CPUC regulations when the agency failed to give the commission a copy of the fuel contract. He described the $360-million fuel contract as having had a “troublesome regulatory history” and raised doubts about its validity because it was not approved by CPUC.

But, according to Fisher, Boertzel’s recommendation is not appropriate and should not be considered by CPUC.

“The intent to open proceedings to make appropriate regulatory reactions to the Mobil fuel contract implies that the contract is defective,” said Fisher, adding that there has been no hearing and no evidence formally presented to the hearing examiner that would cause this implication to be placed into the record as part of the hearing process.

‘Mischaracterized’

Fisher revealed that CUC’s amended petition has been mischaracterized as “fuel procurement” where in fact, it was merely a petition for the approval of an RFP to advertise for fuel procurement submitted to CPUC before the EO was issued.

CUC, she added, continues to assert its position that the mere publication of an RFP for a contract, which may increase rates and charges to a utility customer, is not an appropriate matter for CPUC review and approval under the law.

“But whether this issue is resolved in CUC’s favor or not, it is clear that the commission does not have the power to make a finding or decision regarding the legality of a governor’s executive order,” added Fisher.

CUC and Mobil inked the six-year fuel contract on May 1 at a cost of $360 million