Power, water rate hike OK’d

The Commonwealth Public Utilities Commission has approved increases in the Commonwealth Utilities Corp.’s electric base rate and water charges but turned down an increase in the wastewater rate.

Both rate increases will take effect on Feb. 27, 2012.

In its lengthy meeting Friday, lone commissioner Viola Alepuyo also lowered the levelized energy adjustment clause and ordered a LEAC refund after determining that CUC had charged last year a higher LEAC than allowable.

In its order, the commission stated that the electric base rate hike will allow CUC to raise an additional $3.396 million a year.

According to CUC deputy executive director Alan Fletcher, power customers using 250 kWh monthly will see an increase of $1.82 in their monthly bills. Users of 500 kWh per month will see an increase of $2.57.

It was learned that the approved rate increase is lower than the original amount proposed by both CUC and the commission’s consultant, Georgetown Consulting.

CUC and Georgetown had recommended the rate adjustment due to four factors: the large decrease in billed usage; substantial increase in retirement contributions this fiscal year from 37 percent to 61 percent; the need to account for Commonwealth Development Authority dividend payments beginning 2012; and the higher cost of the Telesource contract to provide power on Tinian.

The commission eventually disregarded the last three elements in the base rate increase approved on Friday.

For water customers, the rate adjustment will result in a $7.55 increase in the monthly bills of average customers using 10,000 gallons.

According to Fletcher and CUC chief financial officer Charles Warren, this new water rate is also lower than the original amount proposed by CUC. Had the original proposal been approved, for average residential user of 10,000 gallons would have seen their monthly bill increase by $12.32.

Meantime, the commission denied the proposed rate hike for wastewater.

CUC has an estimated 10,000 water customers and about 15,000 wastewater customers.

LEAC reduced, refunds OKd

Alepuyo also ordered a new LEAC rate of $0.30550 per kWh effective Jan. 28 this year.

At present, the LEAC rate is $0.30791 per kWh.

CUC and Georgetown earlier recommended reducing it to $0.30071 as a result of the decline in gas prices. CPUC’s order on LEAC reflects a higher reduction that the original petition.

In the same order, CPUC determined that CUC has an over-recovery of $1.986 million from Aug. 1, 2010, through Sept. 30, 2011, and this must be refunded to electric customers over the next 14 months by an adjustment credit of $0.00807.

LEAC is part of the customer’s bill that reflects the cost of fuel. The other element of the bill is the electric base rate.

Grave concern

During Friday’s deliberation, Alepuyo expressed grave concern over the magnitude of the rate increases proposed by both CUC and Georgetown. She called for a recess in the meeting for the two parties to come up with a revised petition that will reflect lower rate adjustments.

“I have instructed the PUC consultant—Georgetown—to look at various ways in order to make a determination whether any increase can be deferred until such time our people can afford it. Our economy is not getting better, government employees are still working at 64 hours, and the commission is very hesitant to raise any of the rates. But I also understand that CUC must operate and it cannot operate at a loss. So with that balancing act, I have given specific instructions to Georgetown to work CUC in order to come up with something that will give relief to rate payers,” said Alepuyo at the beginning of the meeting, just before immediately calling for a recess. A final agreement between CUC and Georgetown was presented to the commission at 2:45pm Friday.

Alepuyo recused herself from discussing the Fund’s employer rate contribution, which was among the factors cited by CUC and Georgetown in their rate hike proposals. Alepuyo is counsel for the Fund, which is in dispute with CUC regarding retirement contribution.

Alepuyo approved a total of 19 proposals during Friday’s meeting, which is effectively the commission’s last meeting as no new commissioner has been appointed yet. Alepuyo, the sole remaining commissioner, will end her term in March. Gov. Benigno R. Fitial has yet to name new commissioners.