CUC defers action on fuel surcharge

The Commonwealth Utilities Corp. board of directors yesterday deferred action on the proposed fuel surcharge and called instead for a more aggressive policy on delinquent accounts.

In a special board meeting, CUC directors Velma Palacios and Joe Torres rallied the support of their colleagues against approving the planned implementation of the surcharge, which the CUC management has proposed in an effort to recover losses from the rising cost of fuel.

The board made the decision after hearing the presentation of CUC comptroller Sohale Samari on the corporation’s financial status, particularly the estimated $15 million that remains uncollected from delinquent customers.

Samari said CUC has only $3 million in available cash and is “quickly running out of money.” He added that the management is taking an aggressive approach in forcing delinquent customers to pay and tackling 10 major accounts for collection every month.

Many of these customers have expressed willingness to negotiate with CUC but how quickly they will settle and how much of the disputed amount CUC can collect remain uncertain, Samari said.

He said the collection of fuel surcharge could generate as much as $10 million for CUC within a year and would ease the corporation’s financial troubles.

Torres, however, raised concern for CUC customers that pay their utility bills on time. He also called for a quicker, less complicated policy on forcing payment of delinquent accounts.

“We have to accept that we’re putting hardship on the community,” Samari said. “We’re also doing the best we can in a difficult area.”

For her part, Palacios said she was unsatisfied with the presentation of facts involved in the proposal. She said she wanted to see how the proposal would actually be presented to the public, should the board approve it.

“What we’re getting is piecemeal information. Right now, I’m not buying anything yet. I want to be convinced. The public’s concern is how much this surcharge will affect their pocket, how much their bill will increase. How can we educate the people [if we don’t have all the necessary information?]” she asked.

CUC vice chair Herman Sablan, who initially supported the fuel surcharge, said he has changed his mind and joined the call for the management to go after delinquent customers.

In a board meeting last month, Samari stressed the urgent need for the imposition of a fuel adjustment charge.

He noted that as of Aug. 20, CUC has total collections of $60 million. This means that the corporation has an average collection of $275,000 a day. But because of the consecutive fuel price increases, CUC now spends over $280,000 for its daily operations.

CUC expenses increased by $3.6 million for fuel alone, Samari said.

The idea of imposing a fuel surcharge of up to 3.5 cents per kilowatt-hour was first brought up by the CUC management in early May.

CUC executive director Lorraine A. Babauta had said the fee would permit CUC “to recover increases and to pass on decreases in fuel costs.”

Generally, the fuel surcharge fee is a charge or credit that is applied to each kilowatt-hour of electricity sold, which is computed each month.

At present, CUC charges residential customers 11 cents per kilowatt-hour and commercial customers 16 cents per kwh.