‘Too late on fuel surcharge’

One of the largest customers of the Commonwealth Utilities Corp. raised questions yesterday about the legality of CUC’s plan to implement a 3.5-cent fuel surcharge fee.

Citing comments from its legal counsel, the Far East Broadcasting Co. said the CUC board of directors lost its opportunity to impose a fuel surcharge when it failed to do so in October 1985.

Acting FEBC executive director David Creel based this argument on the only portion of Public Law 4-47 that permits the imposition of a fuel surcharge fee. The provision reads:

“The board shall determine to impose as of Oct. 1, 1985, a fuel surcharge fee of up to $.035 per kilowatt hour for all consumers of electricity. Once imposed, the board may annually adjust the fuel surcharge fee to reflect the total costs of purchasing fuel for the production of electricity; provided that the fuel surcharge fee shall not increase for consumers of less than 2,001 kilowatt hours per month at a rate of more than $.02 per kilowatt hour per calendar year.”

Creel said it appears that P.L. 4-47, upon which CUC is basing its authority to impose a fuel surcharge, will not authorize the implementation of the FSF at this time.

“The plain meaning of the statute is that the board had one opportunity to impose the FSF and that one opportunity was on Oct. 1, 1985—the date that P.L. 11-47 took effect. Unless we are misreading the statute, this is no longer an option,” Creel told Vice Speaker and House Committee on Public Utilities, Transportation, and Communication chair Timothy Villagomez in a letter.

He added, “The board cannot impose now for the first time—over 19 years later—the FSF. It also follows that since it cannot impose the FSF, it also cannot impose the annual rate increase permitted by the second sentence.”

Creel, however, admitted that he might be wrong as his company has not had the chance to research the legislative history of P.L. 4-47.

Nevertheless, he said that if he was correct, then CUC would need to obtain a new legislative authorization to impose a fuel surcharge before passing any regulation like the one it published on the Commonwealth Register last month.

“It will be up to this Legislature whether or not to give CUC such broad authority a second time,” Creel said.

The Far East Broadcasting Company is a nonprofit, religious shortwave radio station in Marpi that broadcasts to China, Russia, and much of Asia.

FEBC is one of biggest consumers of electricity in the Northern Marianas, and CUC’s largest customer under the residential/nonprofit category.

CUC data show that the utility firm has only one residential/nonprofit costumer with power usage of over 100,001 kwh per month.

In his letter, Creel said FEBC pays over $15,700 a month in electrical bills to CUC. At the residential/nonprofit rate of 11 cents per kwh, this means FEBC consumes over 140,000 kwh per month.

Creel also noted that the implementation of the fuel surcharge fee in December would raise FEBC’s electrical bill by $5,000 per month. The group, which operates on contributions, cannot afford such a huge increase especially at such short notice, he said.

“It is not FEBC’s intent to obstruct any lawful action by CUC. We greatly appreciate the power service which our mission so seriously depends upon. We are only asking that any rate increase be studied carefully, be found to be absolutely necessary, and that the public be given sufficient time to plan how to budget the extra cost,” Creel said.