Muña: Stimulus money will save CUC consumers from rate increases

The anticipated infusion of federal stimulus money may save Commonwealth Utilities Corp. customers from further increases in water and wastewater rates, according to executive director Antonio Muña.

Last month, the Public Utilities Commission approved the 40-percent hike in CUC’s water rates but slightly cut down by 3 cents the current power rates to bridge the gap between CUC’s $5.9 million water revenue deficit and its statutory duty to establish water rates.

Although an 81 percent across-the-board increase for water rates was earlier approved, half of that was suspended until next month to allow the government to identify alternative sources of money.

“We’re hopeful on the stimulus package. This would help decrease the extent of any increases to the existing rates,” Muña told Saipan Tribune yesterday, adding that CUC had submitted applications for both competitive and non-competitive grants.

The official said CUC is also looking into tapping local and CIP funding as alternative options to assist the consuming public.

In the event substitute funds are identified by CUC, half of the approved 81 percent hike in water rates would remain suspended until April 2010, when the full rate increase is expected to automatically go into effect.

The increase in both water and wastewater rates was identified as a means for CUC to be in compliance with the stipulated orders it signed with the U.S. Environmental Protection Agency. The stipulated orders mandate CUC to comply with federal water and wastewater regulations.

As of yesterday, Muña said CUC is on track to meet the deadlines set in the order.

“To date, we are in compliance with the deliverables,” Muña said, alluding to the reports submitted to EPA.

Although the rate increases were not EPA directives but are CUC initiatives to sustain operation, he believes that this is one way to address the agency’s huge funding shortfall, which has been in existence for many years.

“Based on current rates, the revenue for water and wastewater is insufficient,” he said, adding that suspension of any rate increase could result in failure to comply with the stipulated orders.

The April rate increase in water would cover 60 percent of CUC’s water revenue deficit.

The federal stipulated order contains a series of fines and penalties that can be imposed, ranging from $250 daily up to $5,000 a day for non-compliance with the deadlines.