CUC, House to meet again on fuel surcharge

Despite its decision to go ahead with the fuel surcharge fee, the Commonwealth Utilities Corp. is still faced with a shortfall and has indicated that it will be going back to the Legislature to ask for financial assistance.

House Vice Speaker Timothy Villagomez, who chairs the House Committee on Public Utilities, Transportation, and Communications, said that CUC officials would meet with House members today on the fuel surcharge issue.

“They’ve asked if we can sit down and meet,” said Villagomez, even as he expressed disappointment over the CUC board’s decision to impose a 3.5 cents fuel surcharge fee for government and 1.5 cents for commercial and residential users.

“Unfortunately, the board went ahead and passed it at the time when we’re trying to pass legislation addressing the issue,” said Villagomez.

House leadership spokesman Charles Reyes Jr. said the meeting would also include Executive Branch officials.

“This is a long-term problem. It requires closer cooperation between the three parties: the administration, CUC, and the Legislature,” he said.

The CUC earlier said that it would still face a monthly shortfall of $450,000 despite the scheduled implementation of the fuel surcharge next month due to its decision to impose only 1.5 cent among residential and commercial customers, rather than 3.5 cents as originally proposed. CUC said it would only be collecting $795,000 a month in surcharge fees instead of $1.25 million.

CUC said it is counting on the administration or the Legislature to cover the shortfall.

CUC currently charges 11 cents per kwh for households and non-profit groups and 16 cents per kwh for businesses and the government.

The Executive Branch earlier proposed to provide CUC a $150,000 monthly government subsidy for up to four months.

The House, for its part, voted last week to impose a 4-cent fuel surcharge fee on the government and exempt other power users from such fee. The bill is now referred to the Senate for a similar passage.

House Bill 264 provides that the government shall be charged a total of 20 cents per kilowatt hour: 16 cents will serve as payment for the electric bill, while 4 cents will be deposited into a Fuel Surcharge Account under the Department of Finance.

Villagomez, who authored the bill, pointed out that the government rate for electricity was originally 20 cents per kwh prior to 1992.

The bill limits the use of the FSF for fuel expenses and not for CUC’s operations.

“The funds can only be used to defray the additional costs of fuel. If there are surplus funds, those funds will be deposited into the general fund,” it said.

The bill, at the same time, requires CUC to reduce its operational expenses by 10 percent, collect receivables aggressively, and improve the efficiency of its generators, as well as the entire corporation.

It further asks the CUC to hire an independent auditing firm to evaluate the true cost of power production and distribution.