Babauta holds off OK on surcharge fee

Gov. Juan N. Babauta said has held off signing the emergency regulation that would impose an across the board 1.5-cent fuel surcharge fee on all electricity consumers in the CNMI, saying he is “concerned” about the CUC board’s decision.

The governor, whose signature is required to make the surcharge fee regulation effective, said that he would immediately discuss the issue with the board.

“It’s concerns me and I want to make sure how that figure was derived. I’m just concerned. Why the change in figure now? There has to be a rationale,” he said, referring to CUC’s original plan to impose a 3.5-cents surcharge fee.

CUC had said Tuesday that the regulation should be adopted on an emergency basis primarily because CUC’s fuel expense has risen by 128 percent over the past five years.

It said that the cost of production of electricity currently exceeds revenue generated from the sale of electricity to customers, forcing CUC to exhaust all its cash reserves to meet fuel expenses. In the last six months of 2004, CUC spent over $7 million of its cash reserves to pay for fuel.

The utility firm also reported that it will be unable to pay for fuel beginning February 2005.

House Vice Speaker Timothy Villagomez, who chairs the House Committee on Public Utilities, Transportation and Communication, expressed displeasure yesterday over the CUC board’s turnaround on the issue, citing earlier assurances he reportedly got from some board members that the issue was essentially dead.

“I thought this issue was dead and buried,” said Villagomez, who met with CUC officials in a public hearing only last week.

The lawmaker, in efforts to stop the surcharge fee’s implementation last year, had proposed three options: increase the government’s utility rate; use Compact-Impact funds to assist CUC in meeting its fuel expenses; or granting a waiver on CUC’s huge debt with the Commonwealth Development Authority.

The CUC board, voting 5-2, approved the 1.5-cent FSF emergency regulation on Tuesday. It shall take effect 120 days immediately upon filing with the Commonwealth registrar and concurrence by the governor.

The CUC has the option to adopt the regulations on a permanent basis by allowing a 30-day public comment period.

The CUC’s adopted resolution prohibits the CUC comptroller from implementing a surcharge fee higher than 1.5 cents or including past unrecovered excess fuel costs in the surcharge computation without the board’s consent.