CUC base rate hike OK’d

The three-member Commonwealth Public Utilities Commission initially agreed yesterday to the proposed increase in the Commonwealth Utilities Corp.’s electric base rates. This is expected to take effect after the issuance of a formal CPUC decision next week.

This means CUC, upon the effective date of the commission’s order, will be authorized to increase its electric base rates to produce $2.8 million on an annualized basis. This increase would be accomplished with the creation of a $0.21 per kWh “infrastructure surcharge” that the commission also approved for implementation.

According to the commission, the infrastructure surcharge will expire on Jan. 1, 2015, unless extended by CPUC.

CUC officials led by executive director Alan Fletcher and chief financial officer Charles Warren disclosed during deliberation yesterday that also factored in the $2.8 million revenue requirement in the electric base rate is an allocation to pay for CUC’s remaining obligation to Pacific Marine Industrial Corp., the former independent operator of Power Plant 4.

In its initial decision yesterday, CPUC required CUC to undertake a study of its electric distribution infrastructure and develop a list of required capital projects that could be funded by continuing the surcharge after PMIC is paid off.

CUC is required to pay PMIC $341,000 a month until December 2014.

After yesterday’s hearing, Fletcher expressed appreciation for the CPUC’s consideration.

“We thank CPUC because they put in hours to work on this. It’s never popular to raise rates. It’s tough to go to the public, but we feel the money [CUC asked for] is necessary in order to operate the utility agency efficiently to meet our obligations for service as well as stipulated order requirements,” Fletcher told Saipan Tribune.

Yesterday’s deliberation lasted more than four hours, during which the CPUC was presented with additional facts and information pertaining to the proposed base rate hike, along with other CUC proposals.

According to CPUC chair Joseph Guerrero, hearing examiner Harry Boertzel is now drafting what the commission initially recommended in yesterday’s hearing, for adoption at their next meeting.

In affixing the commission’s initial approval to a number of recommendations, Guerrero pointed out the need to properly inform the public and CUC customers of any changes that may appear in their billing.

Besides the $2.8 million base rate increase, CPUC also determined yesterday that CUC should be authorized to institute a 36-month residential refund of $0.023 kWh, which would be funded by a reciprocal increase in commercial rates.

CUC officials and representatives revealed that the refund mechanism aims to provide rebates to residential customers totaling $1.13 million—the same amount that will be raised from CUC’s commercial costumers. This refund is recommended for implementation on March 1, 2017.

CUC initially proposed 20 non-rate fees for the electric utility division, but concerns were expressed on about 10 of these charges. Those 10 are now deferred to the commission’s spring session.

Among the non-rate fees that the CPUC approved was the increase in non-sufficient funds fee from $25 to $40; increase in new service fee for meter change out from $60 to $95; the imposition of a $90 inspection fee; an increase in the meter test fee for single phase from $30 to $75; meter test fee for three phase, $110; a disconnection notice fee of $15; $60 fee for reconnection at meter; and loweding the disconnection fee at meter from $60 to $45.

For water and wastewater divisions, approved were a lab service charge of $60; increase the wastewater tipping fee from $25 to $80; imposition of $100 as fee for backflow device inspection; FOG installation inspection fee, $170; FOG biannual inspection fee, $60; and FOG remediation fee, $110; among others.