CUC board doesn’t want rate increase

Majority of the board of the Commonwealth Utilities Corp. said it does not want to “increase” rates for their residential customers even as the utilities company needs additional revenue to fund several items to recover as well as improve the company.

During a meeting, CUC’s rate consultant, Economists.com, presented several more numbers and scenarios to the board and management of the company of what the rates could look like should they decide to try and recover from losses and fund improvement projects.

Items presented that CUC may consider in their adjustment were the Commonwealth Healthcare Corp. agreement and bad debts increase, payment due to the Commonwealth Development Authority, Typhoon Soudelor restoration and mitigation, non-grant funded capital improvements projects, and power plant reserve fund contribution.

Discussions were made on these items and their corresponding possible rate adjustments should the board decide to fund them and at what amount.

The consultants also took into consideration possible revenues that would come to CUC should a bill that would require commercial establishments be hooked up to the company becomes law.

In the sample computation presented by the rate consultants, the potential rate adjustment was said to result to increased revenue for CUC’s projects, while ratepayers would still pay bills that were lower than what they paid for in 2014 due to savings from oil.

During the meeting, director David Sablan said the rates are not so much of an increase but taking some savings to invest in the utility.

“I have already agreed with 0.129 per kilowatt hour. Increase is a terrible term to use but especially in my opinion, asking our residential, commercial, and government accounts, if we can take some of the savings from the oil reduction so that we can invest in their utility, I will prefer to look at it from that point rather than say it is an increase in rates,” Sablan said.

“This is the dynamic that we need to provide to our management so that they don’t hinder or have to decide, ‘should I buy a transformer, buy some wire, or make payroll?’ they have to make these kind of decisions because they don’t have enough cash, they don’t have resources. It’s a reflection of our ability as policymakers not providing them the tools and the resources necessary to keep this utility running,” he added.

Sablan then made a motion for the board to approve the model presented to them but pending final numbers of the rates.

“I move that we approve this model that has been presented to us with at least six adjustments that have been presented to us, with more refining of the numbers once we have a clearer picture of our financial situation sometime in March as presented to us by the chief financial officer. It’s probable that some of these numbers will be adjusted but it is the model that we need to work on as we move forward to present a case to the PUC (Public Utilities Commission) sometime after March when the board finally agrees on what is going to be the final number,” Sablan said when he clarified the motion.

He added that he only mentioned the 10 to 12 cents because that will probably be the number that they will be working on.

Director Diego Songao seconded the motion and director Chris Conception voted yes, but the motion ultimately failed following the majority of “no” votes from chair Adelina Roberto, vice chair Eric San Nicolas, and directors Joe Torres and Albert Taitano.

“I seconded the motion because I see the need that we need to take responsibility of our obligations, and event to strengthen our infrastructure and to restore back the expenditures that we have for Typhoon Soudelor with conditions to look at some of the resources,” Songao send in an interview.

Roberto said they did not vote yes to the motion because they did not agree to the rate presented.

“We are not agreeing to that rate. We wanted to get our financial statement becuase we are not trying to increase the rate, we are just trying to recover the loss,” Roberto said.

“My position is, for any increase, that will be a totally different story. We can probably start cutting salaries before we go with the increase, that will be my position,” Torres said.

“I was very concerned that if those sections that proposed increase in rates that economist.com showed us, if we adopted all of that, that would mean that the residents struggling now, will struggle even more,” San Nicolas said

“I’m not comfortable with increasing rates to the points where residents are going to choose between feeding their children or keeping the lights on. That’s absolutely inhumane,” he added.

Asked how CUC could then have additional revenues that it needs without increasing the rates, San Nicolas said they are working with the Legislature.

“We are working very closely with the Legislature for some of the proposed legislation for that are already in the committee or you know in the processed or potentially be drafted,” San Nicolas said.

“It’s not a 100 percent solution but it’s definitely a step in that direction,” he added.

From management, acting executive director Gary Camacho said they have to consider both the community and the company.

“It’s an opportune time but at the same token we need to ensure that the decisions made are accurate decisions and to the best interest of the community and the best interests of CUC,” Camacho said.