CUC told to fast track test program for prepaid power

Legislators urged the Commonwealth Utilities Corp. to fast track the implementation of a pilot project for the prepaid power program, which is seen as a means to help solve CUC’s collection problems while allowing customers to better manage their power usage.

The prepaid power proposal, which had been on the table for many years, came up several times during a hearing before the Senate Committee on Public Utilities, Transportation and Communications on two separate bills related to CUC. One of the bills proposes to exempt low-income customers from paying the $60 reconnection fee CUC now charges customers who have had their power cut off. The other bill seeks to require CUC to set up an Internet payment system for customers.

Sen. Luis Crisostimo said both bills would not be necessary if CUC has prepaid power service in place.

Similar to prepaid call cards sold by telecommunications companies, the prepaid power program would allow customers to buy electricity in advance and in different denominations. Customers could check how much credit they have left in their account. Once there is nothing left, the power would automatically go off. The customer only has to buy more credits to get power back on.

“I think we should go 100 percent prepaid,” said Crisostimo, citing advantages such as reduced costs and improved cash flow for CUC.

One major obstacle to implementing the prepaid power system is CUC’s fluctuating rate system. CUC executive director Antonio Muña asked the Senate for at least 30 days to study how other electric companies in the region are implementing the program and come up with a report on the proposal.

LIHEAP

During the hearing, Muña raised concern about the House-approved bill that exempts recipients of the Low Income Home Energy Assistance Program from paying CUC’s $60 reconnection fee. While he did not provide specific information on the potential cost impact on CUC, Muña said the proposal would result in additional costs that would eventually be passed on to paying customers.

“Bear in mind that CUC is a rate-driven agency. Any cost has to be accounted for. Every dollar we don’t collect, we have to look elsewhere to make up for it. At the end of the day, any relief given to one class of customers has to be passed on to the other customers,” Muña said.

Finance Secretary Eloy Inos, who was also at the hearing, noted that the bill might not work, even with the provision that requires CUC to be reimbursed for the waived reconnection fees through legislative appropriation. Inos said this was not enough assurance that CUC would be paid.

“We had the same case with the 30 percent retirement bonus. The law says the Retirement Fund will be reimbursed, but we never paid them,” Inos said.

For her part, Sen. Maria Frica T. Pangelinan said the bill does not address the root of the problem, which she said is the sheer inability of LIHEAP recipients to pay their bills even with government help.

“You need to be an active customer to qualify for LIHEAP. So what we are proposing here is basically a local subsidy so people can stay in the federal subsidy program. But I don’t think this legislation is the solution,” she said.

Sen. Paul A. Manglona, PUTC chairman, also expressed reluctance to support the bill, saying it does not offer an incentive for LIHEAP recipients to conserve power.

Based on CUC data as of May 2008, very few LIHEAP recipients stand to benefit from the bill. On the average, about 13 of the approximately 675 LIHEAP recipients get their power disconnected each month.

Internet payment

In the same hearing, Muña told lawmakers that CUC is in the early process of developing a website that customers can use to pay their bills. He said the utility expects to have the system in place sooner than the deadline proposed in the Internet payment legislation now before Senate.

The bill mandates CUC to establish the service within 180 days of the measure becoming law.

“We’re moving forward with establishing this service whether or not the Legislature asks for it. We definitely need this. A lot of customers are coming to the Dandan payment center. Whatever we can do to reduce the lines will benefit us as well,” said Muña.