CPUC decision on incentive rate contract out today

The Commonwealth Public Utilities Commission will be presenting its decision today on the proposed incentive rate for large commercial customers of the Commonwealth Utilities Corp.

The commission will be announcing its decision at the Commonwealth Development Authority’s conference room at 9am.

With fiscal year 2014 nearing its end, CUC board chair David Sablan Jr. told CUC officials on Tuesday that the regulatory commission has to make its decision soon on the matter.

“We need to speed up this process because it is going on for too long. By October we are in the next fiscal year [and] they must come up with a decision,” Sablan told Fletcher at Tuesday’s board meeting.

CUC executive director Alan Fletcher told the board that CPUC had decided to solicit comments from large commercial customers about the proposal.

Fletcher said the commission was supposed to come up with a decision yesterday, Sept. 25, but due to changes in CUC’s court hearing yesterday, CPUC moved its meeting to today.

CUC board member Joseph Torres and CUC board vice chair Diego Songao agreed with Sablan in speeding up the process.

At their last public hearing, CPUC hearing examiner Harry Boertzel asked CPUC commissioners to table the experimental tariff rider incentive rate because they needed the input and comments of large commercial customers before approval.

Brief history
CUC’s consultant, economist.com managing director Robert Young, earlier expressed concern over the amount of time CUC and CPUC has already invested in coming up with the proposal.

The standby charge was among the rate petitions CUC filed with the CPUC in July last year; it was supposed to be implemented in October 2013. The proposal was snagged by delays in succeeding months and was eventually withdrawn by CUC’s new board on April 14, 2014.

At the time, CUC’s then-chief financial officer Charles Warren said that CUC, CPUC, Georgetown Consulting Group, economist.com, and large commercial customers were working on an introductory rate.

Consultants for both CPUC and CUC had approved a modified incentive rate for CUC’s existing commercial rate and required CUC to submit a contract by July 31, 2014. After some initial concerns were ironed out, Georgetown recommended the new rate for approval Thursday last week.

The proposed contract will cover large commercial customers that are locating, expanding, or returning their entire load to CUC’s distribution system on all three islands in the CNMI.

Contract terms
Customers availing of this incentive rate must agree to remain full CUC customers for the four-year duration of the IR term.

The contract is also open to new participants for a window of four months from the time it is approved.

Commercial customers are qualified for the new rate if they have a generation capacity of 400kW or greater and generating 90 percent or more of their annual electric needs; commercial customers that expand their existing facility that results in an increase in load of 200kW or greater or expand their hotel by 75 rooms or greater; or new commercial customers with electric generation capacity of 400kW or greater.

The four-year incentive rate will provide a reduction of 8.3 cents per kWh from CUC’s commercial electric base rate from the date the customer starts purchasing electricity.