Some questions for CUC

As a stakeholder in CUC’s standing, I have several questions about its budget and perhaps it would shed some interesting discussions for the ratepayers. Such clarification is crucial and when laid out in layman’s terms so that every ratepayer would have full satisfaction and understanding of the value of electric, water, and wastewater treatment services produced and delivered by CUC, subsequent rate increases could be agreeable to ratepayers pursuant with the numbers and appertaining assumptions that are sanctioned and justified by the management officials.

It is a fact that CUC is projecting a positive net operating income of $2.5 million for fiscal year 2013. This amount is reserved for debt service and other capital outlays of about $100,000. The power division is expected to have a net operating income of $4.9 million, the water division to break even, and a loss of $2.4 million for the wastewater division. A common cost (administration) in the amount of $6.8 million was allocated to the three divisions as follows: $3.95 million to the power division, $2.9 million to water, and $.93 million to wastewater. CUC is expecting to buy fuel products in the amount of $78.2 million for fiscal year 2013. In fiscal year 2012 CUC paid $65.2 million for fuel but only consumed a total of $63.2 of this total. A residual amount of $2.0 million was not explained.

The pivotal and most favored justification by the management is the EPA stipulated orders. Whatever this is, it seems that CUC is do or die on this, if such mandates are ignored. Where and how these mandates affect the ratepayers—it is only coming from a monolithic source and without analysis and scrutiny by a ratepayer—we can only rely on what was selectively reported by CUC. As a ratepayer, do I have an interest in this ruling by EPA? You can give that more than a 100 percent affirmative.

I look forward for CUC’s answers to the following questions:

1. Are there any non-operating incomes, or non-operating expenses that we should know about that would have some financial effects on the fiscal year 2013 operating income?

2. Is there any particular reason why the water division is expected to break even?

3. Is there any particular or specific assumption and explanation why the wastewater division is targeted for loss position?

4. CUC aggregates or bundles all the revenue and cost centers for all the three islands. Is CUC in a position to separate the business concerns of each of the islands so that the ratepayers would have a clear understanding what the true operating income and operating expenses are pertaining to a specific island business unit or center?

5. What are the basis for the cost allocation of the administration cost to the power, water, and wastewater divisions?

6. What is the debt service and cost outlays? Is this a reserve fund? Can the ratepayers see specific historical data on this for the last five years?

7. The $78.1 million fuel estimate, can CUC produce in layman’s term how this amount is shared by all ratepayers? Is this projection consistent for the next year and each year that follows up to a five-year period?

These are just preliminary questions for now. I would suspect that more questions would follow. In the meantime, we would be able to piece together a right frame of mind as we examine the details of CUC’s burden to the ratepayers that sustain its ongoing concern.