CPUC decision on standby charge asked to be delayed anew

A standby charge for large commercial customers of the utilities corporation may not happen anytime soon after the Commonwealth Public Utilities Commission disclosed yesterday that it will grant the Saipan Facilities Management Association’s request to give it some time to do its own analysis and comments to what it described as “inaccurate” findings that require a management audit.
Yesterday’s public hearing on the proposed $20 per kW/monthly charge to nine large customers saw the attendance of top executives and representatives from various hotels on island. The Commonwealth Utilities Corp. endorsed a March 20, 2014, implementation date of the proposal which once approved will bring the agency $2 million in revenues annually.

Before a jam-packed crowd at the Commonwealth Development Authority’s conference room yesterday, the SFMA spokesperson Mark Moss appealed to CPUC to delay the decision until such time it hears the concerns of the association which initially asked to be given six months to prepare and file all needed documents to the commission.

Saipan Tribune learned that SFMA wrote to CPUC last March 14 indicating its strong opposition to the standby charge. It described the economists.com findings on the proposal as unacceptable as it used the “trend” as basis. The economists.com is the consultant for the CUC which filed a supplemental report to the commission justifying the standby charge is reasonable.

“The findings of economists.com require a management audit which we will gladly present, but we request that you avail us the same time period as it took CUC to recommend this charge to conduct our own analysis. Understanding CUC’s needs to collect 100 percent of what it costs to generate energy, please understand that the private sector is not the problem to their shortfall,” SFMA’s letter stated.

SFMA is a group made up of facilities engineers and managers of various companies on Saipan. It has nine members. The group, it was learned, started several years ago to share best practices, hard-to-get parts at times, and to toss around ideas on running effective and efficient machinery on all levels.

SFMA disclosed that members were “forced” to invest in their own power plants due to CUC’s inability to provide consistent power to their businesses. In several instances, it was revealed that it even aided CUC in providing power supply in its time of need. Without this partnership, it claims that many residences and schools would have experienced extended outages in the past.

CPUC hearing examiner Harry Boertzel yesterday said the SFMA is considered a “participant” in the proceedings of the case because the proposed standby charge will materially affect its members. He then recommended to the CPUC to allow some period of time for the group to file its testimonies.

But for CPUC consultant—Georgetown Consulting—the six-month timeframe request is “too long” to resolve the issue. It was cited that CUC’s proposal has been on the table since July 2013 and quite some time had been expended on examining the proposal.

CUC counsels Deborah Fisher and James Sirok also took turns in convincing the commission to consider the plight of CUC which they admitted is very much in need to purchase typhoon readiness supplies and equipment. They pointed out that since the approval of the standby charge petition has been delayed since last year, CUC is already losing considerable amount of revenues that could help in its operational needs. They feared that the proceedings for the standby charge case would escalate to up to nine months to a year—like in a usual rate case.

Fisher asked that if CPUC will allow time for SFMA to file its comments on the proposal, CUC then must be allowed to implement the charge to its “other big customers.” Additionally, CUC must also be granted enough time to review and respond to what the SFMA may file.

After hearing the sides, Moss agreed to shorten the “timeframe” for the group to file comments from initial request of six months to 45 days.

Moss hinted that the association is willing to enter a compromise agreement with CUC “to resolve the issue of going back to the grid.”

‘Is CPUC ready to decide?’

When asked if CPUC is ready to decide on standby charge at this time, CPUC chair Joe Guerrero asked for patience and understanding.

“There’s no clear picture when a final decision will be made because today, we allow the ‘continuance’ to provide more information. The goal of CPUC is to entertain this request of CUC as expeditiously as possible because it is important to them, but balancing the need of the association to be heard and perhaps to create a better proposal for standby charge,” Guerrero told Saipan Tribune after yesterday’s public hearing.

Guerrero disclosed that by Friday, CPUC’s hearing examiner is expected to file a crafted “order” which will be considered in next week’s regular business meeting of CPUC.

By next week, CPUC will act whether or not it will allow the “continuance” as recommended by the hearing examiner. If so, a timeline will be set as to when SFMA is allowed to file comments, schedule for parties’ responses, and other timetables.

When asked if CPUC was satisfied with the supplemental information from CUC, Guerrero said: “I am satisfied on what we received (from CUC)…but we still have some questions.”