Senators to ask CUC not to renew economists.com contract

Senators took turns lambasting during yesterday afternoon’s session the Commonwealth Utilities Corp. and its consultants for what they described as “luxurious contracts” and “ridiculous” charges, even as they draft a resolution asking CUC “not to renew” its rate consultant contract with economists.com when it expires on July 18.

CUC has a $349,000 contract with economists.com.

Sen. Pete Reyes (Ind-Saipan), chairman of the Senate Committee on Public Utilities, Transportation and Communications, said he was earlier considering asking the Commonwealth Public Utilities Commission to end its consulting services contract with Georgetown Consulting Group.

Georgetown’s contract with CPUC is expiring on Sept. 30. Georgetown has charged and collected over $1.626 million in fees for services rendered to CPUC from fiscal year 2009 through 2014.

Reyes told fellow senators that during yesterday’s hearing on CUC’s non-rate fee requests, economists.com was “finding a way to increase CUC rates and desperately tries to justifies that,” while he said Georgetown was “compassionate” with CUC customers.

“economists.com is asking for a 10 percent in penalty charge, but Georgetown says maybe 1 percent is okay,” Reyes said.

Senate PUTC vice chair Jack Borja (Ind-Tinian) echoed Reyes’ sentiments, adding that it is “totally unacceptable” for the government to have so many consultants.

Borja said people end up paying for these consultants.

Reyes said in this modern era, a $200 power reconnection fee is excessive, pointing out that economists.com is recommending this to CUC which, in turn, seeks CPUC approval.

“In the hearing, we heard that CUC needs four to eight people to put up a meter. Holy moly! And it takes four to six hours to accomplish the installation of the meter. …The CNMI is going backwards,” Reyes said.

Senate vice president Victor Hocog (R-Rota) described this as “ridiculous.”

Senate floor leader Ray Yumul (Ind-Saipan) said going from a zero charge to “astronomical” rates is a “road to disaster.”

“Basically [CUC] is setting [customers] up for failure,” Yumul said, also referring to late charges, disconnection fee and reconnection fee that he said end up “exceeding the original billing.” Yumul said he understands CUC receives “lots of grants for the meters.”

Sen. Jovita Taimanao (Ind-Rota), chairman of the Senate Fiscal Affairs Committee, said budget hearings are coming up and her panel will scrutinize CUC’s contracts.

This is not the first time that lawmakers have criticized CUC and its proposed rates during privilege speech. Two weeks ago, the Saipan and Northern Islands Legislative Delegation did the same, using phrases such as “bordering on ridiculous” and “idiotic proposals.”

Lawmakers were reacting to CUC’s proposed new and increased fees that include up to 250 percent hikes for some, new fees as high as $800, and late charges from 1 percent to 9 percent. They also warned CUC of potentially violating laws that set certain rates and fees.