Torres: Saipan subsidizing Rota, Tinian power users

Customers on Saipan are paying to help deliver utility service to Rota and Tinian residents, a lawmaker said.

Rep. Stanley T. Torres, of Precinct 3, said that Saipan customers pay more than what it costs the Commonwealth Utilities Corp. to provide power and water to the island.

CUC spends approximately $81 million a year to serve Saipan. Meanwhile, annual CUC revenue on Saipan totals $82 million.

Despite the $1-million surplus on Saipan, CUC is lacking funds because of shortfalls in its Tinian and Rota operations. The shortfall amounts to $4.7 million on Tinian and $800,000 on Rota.

According to Torres, it costs CUC about $12.7 million a year to serve Tinian, but collects only $8 million from the island’s customers.

On Rota, CUC expenses total $4 million, and revenues reach only $3.2 million.

“Saipan customers are paying for Tinian and Rota. No wonder Telesource wants to move to Saipan to take over our power plants. This is where the beef is,” said Torres.

Telesource CNMI, which operates the Tinian power plant, has offered to bring one of its generators to augment the power supply on Saipan.

Several calls were made to CUC executive director Anthony Guerrero, but they were not returned.

The Legislature is currently considering legislation to reverse the October 2007 rollback of commonwealth-wide power rates.

House Bill 16-79 would restore the previous rate structure that the Commonwealth Utilities Corp. adopted in 2006 in a bid to cope with oil price increases.

The bill would overturn Public Law 15-94, which forced residential rates down to 17 cents per kWh in October 2007, and either reduced or scrapped other charges for residential customers.

But under the latest version of the bill, the recently organized Public Utilities Commission must set new rates within those 60 days. If the regulatory body fails to do so, the rolled-back rates will again come into effect.

The 15th Legislature passed P.L. 15-94 amid pressure from the consumers who were suffering from the sudden hike in power rates.

However, the Legislature’s action hurt the utility’s finances. According to CUC, the rollback, compounded by the rising cost of fuel, has caused the utility to face a monthly shortfall of about $1 million for fuel. For months now, the cash-strapped government has ended up paying millions of dollars in fuel subsidy to CUC.

This occurred even though the 17-cent rate remained in effect for one month only. In November 2007, CUC adopted emergency regulations that enabled the utility to adjust the power rates depending on fuel prices.