The Commonwealth Utilities Corp. plans to file a supplemental petition to the rate petition it filed with the Commonwealth Public Utilities Commission two months ago, according to Commonwealth Utilities Corp. CUC chief financial officer Charles Warren.
Based on the petition filed last July, CUC proposes a rate hike on electric base rate effective Oct. 1. Warren, however, said that due to the anticipated delay on the commission hearing, CUC would file a supplement to the petition in time for the anticipated November rate hearing.
“We do anticipate filing a supplement to the petition,” Warren told Saipan Tribune. “The CPUC hearing will most likely be in November.” The chief financial officer pointed out that the July filing does not include any proposal to increase the LEAC of customers. LEAC stands for levelized energy adjustment clause and pertains to the fuel cost of CUC and one of the components of the customer’s billing.
“We have no plans to increase the LEAC at this time,” Warren pointed out. Asked when the new proposed rate hike for electric base will be implemented, Warren said everything depends on the CPUC.
“We do not know the target date until the commission sets the hearing date,” he said.
According to CUC executive director Alan Fletcher, any changes to the LEAC must go through the CPUC. This would be a separate filing from the current petition.
Fletcher earlier disclosed that CUC, since 2006, has been incurring operating losses amounting to $74 million.
“These operating losses are identified in our audited financial statements produced each fiscal year. These losses result in the utility being severely underfunded, which results in deferred maintenance, lack of typhoon readiness, and general disrepair of the power, water, and wastewater systems,” explained Fletcher to Saipan Tribune.
When asked about the supplemental petition, Fletcher admitted that CUC is still working on all the logistics.
“We are still working through all those logistics, so no decisions have been made. If and when a petition is developed for filing, we will be happy to share that that information. We do not have a hearing date as of yet, this is somewhat dependent on staffing at the CPUC,” he added.
Based on the July petition, CUC proposed to slightly adjust its customers’ electric base rate, which represents the amount CUC pays for all non-fuel cost to produce and deliver electricity.
Base rate also includes complying with the requirements of Stipulated Orders. A residential customer using 300 kWh of electric service currently pays $109.92 which would increase to $111.50—or an increase of $1.58—if granted by CPUC. For those residential users of 500 kWh, their monthly total of $178.08 would increase to $200.26—or an increase of $22.18. A residential customer using 1,000 kWh of electric service currently pays $382.97; that monthly total would increase to $438.15—or increase of $55.18.
CUC also filed a rate petition recommending increases in water, sewer, and electric base rates, which if granted, will take effect on Oct. 1, 2013. Besides these proposals, CUC also asked the commission that CUC’s lowest income customers receive significant additional credit to save them money on their bills and to limit the impact of the proposed rate adjustment.
Under the same petition, CUC also recommended the implementation of a full cost-based rate to the government, public schools, hospital, and the ports authority over a five-year period.
For many years, these classes of customers have been assessed a volume rate that is excess of the cost CUC incurs in providing service to them. CUC, in its petition, admitted that this is a well-intentioned program that helped subsidize residential and commercial water and wastewater rates. Unfortunately today, some government payers are no longer able to meet this obligation.
The full cost-based rate as recommended will result in a gradual reduction of each of these customer class’ rates in each of the next five years.
CUC also proposed the restructuring of the electric Lifeline rate with a plan that is more beneficial to the lowest-income customers who have minimal usage by offering a credit of up to $28 per month for residential customers who have less than 200 kWh per month consumption.