PUC holds wastewater rate hike

The Public Utilities Commission has decided to hold off on raising wastewater rates at this time, saying it is not reasonable or fair for residents to cover the costs of commercial enterprises not paying for service.

Both the Commonwealth Utilities Corp. and the Georgetown Consulting Group recommended that PUC raise the wastewater rates across the board by 173.4 percent to help the division become financially independent.

The division incurred a deficit of $3.86 million during the last fiscal year.

At a public hearing last week, Georgetown consultant Larry Gawlik said he believes millions of dollars are being lost from a loophole that allows non-metered customers to go without paying for service.

This finding was why PUC decided to hold off on a rate increase.

“[PUC] is not persuaded that this proposed increase in wastewater rates would be either just and reasonable or fair when there is evidence in the record that significant commercial establishments on Saipan are connected to CUC’s wastewater system, but are neither metered nor billed for this wastewater system,” the commission wrote in their decision.

Gawlik declined to name the entities during the public hearing. Bruce Megarr, CUC’s deputy director for the Water and Sewer division, also declined to disclose the customers during Thursday’s public meeting.

The hearing examiner is authorized to oversee an investigation to determine what commercial entities are not paying for service and what action may be taken. The report must be ready on or before June 1, at which time the PUC may reconsider the wastewater rates.

Rates for water were increased by 81 percent at the meeting. However, 50 percent of the increase is suspended until June 1, in order to give the government and others time to identify funding sources. For example, a residential customer using up to 3,000 gallons used to be charged $1 per 1,000 gallons. They will now pay $1.41 for each 1,000 gallons. In June, the rate will go up to $1.81 per 1,000 gallons for those customers.

During the last fiscal year, CUC’s water division incurred a deficit of $5.99 million.

In the order, the commissioners noted the rate decisions are impacted by a consent decree signed between the U.S. Environmental Protection Agency and CUC to compel the utility agency to adhere to federal regulations governing water, sewer, power, and fuel.

Also during Thursday’s meeting, the commissioners set the new power rate at $0.20147 per kilowatt-hour—a slight decrease from the $0.22989 customers paid the last three months. The new rate will continue until Sept. 30, 2009, at which time a new rate will be determined.