Delay sought on surcharge

Two Commonwealth Utilities Corp. board members asked yesterday for a delay in the implementation of the fuel surcharge fee, as they accused their chairman of making unilateral decisions on behalf of the full board.

“We strongly request [that] implementation of the fuel surcharge fee be delayed until the full board convenes in an open, noticed meeting,” board members Velma Ann M. Palacios and Joseph T. Torres said in a memorandum to CUC chair Francisco Q. Guerrero.

Both board members said a special meeting should be called to discuss the fuel surcharge and Guerrero’s actions concerning CUC’s fuel supply contract with Mobil.

Specifically, they sought an explanation as to how the fuel surcharge regulations were adopted as final and permanent, when CUC’s two legal counsels—Kay Delafield and Edward Manibusan—had provided an opinion that this was not possible.

Further, they demanded a copy of the legal opinion wherein the Attorney General’s Office, according to Delafield, stated that the fuel surcharge could be implemented starting Feb. 28, Monday.

Lastly, the board members questioned Guerrero’s offer of contract extension and promissory note to Mobil “without the concurrence of the full [board] or majority of the board members.”

“We would like to go on record that most of these issues have not been brought to the attention of the full board. You are speaking on behalf of the board when the full (or majority of the) board has not had the opportunity to discuss these issues in an open meeting,” a portion of the memorandum read.

In an interview, Guerrero said he found Palacios and Torres’ concerns without merit and uncalled for.

He maintained that the majority of the CUC board members have already expressed their support for the fuel surcharge when they voted in favor of adopting the emergency regulations on Jan. 25, 2005.

“These two just want to argue. But we cannot afford to keep wasting time. We have urgent obligations to meet. The decision was already made by the majority on the fuel surcharge. I don’t want to go back and forth. It’s a waste of the board members’ time,” Guerrero said.

He also pointed out that the offers to Mobil were made only for the sake of discussion and did not materialize as CUC eventually raised the money to pay the fuel company, which had threatened to suspend deliveries if CUC did not settle its $2 million outstanding account.

The fuel surcharge regulation was originally proposed in October 2004.

On Nov. 26, the CUC board approved the fuel surcharge regulations with some modifications. The board’s decision would have increased the government and commercial rates by 3.5 cents per kwh, and the residential rate by 1.5 cents.

The board, however, had to make another vote four days later, after the AGO questioned the approved regulation for being too different from the version earlier presented to the public and for setting different rates for different classes of customers. The proposed 3.5-cent fuel surcharge failed to receive enough votes at the Nov. 30 meeting, with three voting in favor of the plan and three voting against it.

In another attempt to pass the policy, the board majority approved on Jan. 25 the adoption of an emergency regulation that would implement a 1.5-cent fuel surcharge. An emergency regulation needs only the governor’s concurrence for it to become effective.

Gov. Juan N. Babauta however refused to concur.

Earlier this month, CUC attorneys opined that the utility firm might have to re-publish the whole regulation and undergo the required 30-day public comment period before it can adopt the policy under normal procedures.

But after a Feb. 14 meeting with the AGO, Delafield reported that the attorney general has issued an opinion removing any obstacle to the final promulgation of the regulation.

“The attorney general found that the two regulations [the one published on Oct. 26, 2004 and the one approved on Jan. 25, 2005] did not differ materially. Thus, publication would give the regulation full effect as an adoption after publication, notice, and hearing,” Delafield said.