Lack of funds deters conduct of CUC infrastructure study

The cash-strapped Commonwealth Utilities Corp. has no money to do an electric distribution infrastructure study—a project that the Commonwealth Public Utilities Commission’s hearing examiner has recommended.

“The commission should not implement an order for CUC to do a rate study at this time. CUC testified that there is no grant money to do the study and that it does not have funds available for the rate study. The funding issue is central to this discussion, especially as CUC has not been awarded the amount of rate revenue which the commission has already found to be just and reasonable,” according to CUC’s response submitted last week to the commission.

In his June 13 report to CPUC, hearing examiner Harry Boertzel had recommended that CUC should be ordered and directed to comply with the development of an electric distribution infrastructure study.

But according to CUC, the agency does not have a reserve account or other credit to pay for such a study. Requiring CUC to perform a task it does not have available funds to pay for will only set CUC up for failure, according to its report.

CUC also warned of a new rate hike case if the agency is forced to do the study.

“In the alternative, it will also mean that the commission will have to consider a petition for a rate increase to fund this study. CUC should be required to comply with ordering provision only after it is able to obtain funding to perform this function,” it added.

In the same document turned in last week to CPUC, the utilities agency also clarified some information and issues raised by the CPUC hearing examiner’s June 13 report.

Among these is the Incentive Tariff, which was jointly agreed by CUC and CPUC consultant Georgetown Consulting.

“The [hearing examiner] report should reflect that the Incentive Tariff was stipulated to between the parties,” it said, adding that the same report should also reflect that the incentive tariff starts four months after approval of the order.

CUC specifically countered the hearing examiner’s report that “the Tariff will be effective the day after the commission’s decision.”

“CUC bargained for and agreed that the four-month period would begin to run based on the approval date of the master contract. Accordingly, the report and the commission’s ultimate decision should reflect the language set forth in the Tariff,” added CUC’s response letter.