The Commonwealth Utilities Corp. expects to incur a significantly lower deficit by the end of this fiscal year this month.
The agency’s chief financial officer, Charles Warren, told Saipan Tribune yesterday that CUC is projected to post only about $2 million in operating losses in fiscal year 2013, which will end on Sept, 30, 2013.
Warren described this forecast deficit as much lower than what the utilities corporation recorded in fiscal year 2012, totaling $7.7 million.
Data obtained by Saipan Tribune show that in the first nine months of the fiscal year, from October through June, CUC posted operating revenue of $75.064 million against the agency’s operating expenditures of $76.449 million in the same period. For these months alone, the utilities corporation incurred losses totaling $1.385 million.
According to Warren, from October to June this year CUC recorded a gain of $1,368,231 from operating the power facility. However, in the same period CUC registered losses of $2,072,315 in operations for water and $681,215 in operating the wastewater facility. This resulted in operating losses totaling $1,385,299 in nine months.
In fiscal year 2012, CUC experienced losses in all three facilities: losses incurred for power operation totaled $2,609,008; losses for water operations was at $3,135,092; and for wastewater operation, $1,975,975. These resulted in overall operating losses of $7.7 million in the 12-month period.
According to Warren, CUC averaged monthly operating revenues of $8.3 million in fiscal year 2013.
CUC is an autonomous agency that heavily depends on its revenues and collection from utility customers. At present, there is a rate petition filed by the agency before the Commonwealth Public Utilities Commission that, if approved, will take effect on Oct. 1.
Warren said this petition is for base rates only and does not contain a request to increase the fuel charge, at least for now.
A customer’s bill is composed of the electric base rate, which deals with the non-fuel expenses, and the levelized energy adjustment clause, or LEAC, which pertains to the fuel cost of the agency.
CUC’s fuel charge, which includes LEAC and water and wastewater electric charges, are directly tied to world markets and account for 65 percent of costs for operating the power, water, and wastewater systems.
The Public Utilities Commission has yet to schedule a hearing for the rate petition.
Acting CUC executive director Alan Fletcher earlier said that despite the multiple progresses of the island’s utilities agency, the corporation still has a long way to go before it can become a modern sustainable utility.
He revealed that CUC has long been an underfunded utility and nearly collapsed in 2008-2009. Since 2006, the agency has accumulated over $74 million in operating losses.
According to Fletcher, in order to develop the best solution for the CNMI utility situation, CUC will be completing a series of plans and proposals designed to determine what base-load generation and renewable energy opportunities are commercially available and cost-effective.