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Bill gives PUC a year to set rates
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Posted on Apr 24 2008
Rep. Heinz Hofschneider introduced yesterday a compromise bill to address the cash flow problem being experienced by the Commonwealth Utilities Corp.
Hofschneider’s bill is a modified version of the power rates bill that the Senate shelved earlier this week. The new bill proposes to suspend for one year the rolled back rates set forth in Public Law 15-94.
In other words, the Public Utilities Commission will have one year to organize and establish utility rates. Meantime, CUC will be able to set its own rates.
The shelved version of the bill proposed to repeal P.L. 15-94. The Senate decided not to act on the bill, as members believe CUC should not be allowed to go unregulated indefinitely.
During a session of the House yesterday, Hofschneider lashed at lawmakers who, he said, do not seem to understand the urgency and gravity of CUC’s financial troubles.
“By Friday (today), CUC will have no penny in its account. Is that what we are waiting for? For CUC to go on complete bankruptcy?” he asked.
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.
But the regulations expired last month. Currently, CUC is back to charging residential customers 17.6 cents per kWh of power consumed.
