Power rate hike looms

In what may be a prelude to power rate hike in the next few months, the Commonwealth Utilities Corp. will commission a study to reassess the impact to its operations of the rising fuel costs and ever increasing number of delinquent customers.

CUC directors are expected to give their go-signal in hiring experts to conduct the review during a scheduled board meeting today.

But Executive Director Timothy P. Villagomez said there is no firm plan yet on rate increases as the study could take for a while before coming up with its findings.

“The board has requested that I look into the possibility of reassessing the rates for CUC,” he told in an interview yesterday. “That doesn’t necessarily mean an increase, but to see whether these rates are consistent with the times.”

At present, residential customers are paying 11 cents per kilowatt/hour, while commercial and public establishments are being charged 16 cents. The rates have been in place for the last five years.

The utility chief declined to comment on any suggestion of higher power rates once the study is completed, whose contract will be bid out in the next few weeks.

“You are beginning to assume the results of the report… A study will have to be conducted first and it will take a while. We haven’t even gone to the preliminary,” said Mr. Villagomez.

The move comes amid the shaky financial shape of the government-owned utility corporation largely due to unstable price of fuel in the world market.

Likewise, delinquent customers, particularly the government which owes over $12 million in unpaid utility billings, have contributed to narrow profit margin over the last few months.

Last September, the CUC comptroller warned the board of rising operating costs as a result of the hike in fuel prices. Oil giants have increased their prices four times since February 2000.

Based on the financial report for the first nine months of FY 2000, CUC realized revenues of $48.8 million as opposed to expenditures of nearly $47 million. The close gap was attributed to drastic increase in fuel costs which represented 42 percent of the total expenditures.

Utility officials have maintained the corporation anticipates difficulties in meeting the operational costs if it does not collect payment from the government.

CUC and the Department of Finance are currently locked in a dispute over the outstanding account of the government. They have yet to reach a settlement on the unpaid obligations.