The CNMI’s utilities corporation faces a significant drop in its projected revenue beginning this new fiscal year due to the impact of a newly enacted law that provides relief to public schools.
Charles Warren, chief financial officer of the Commonwealth Utilities Corp., disclosed yesterday that the rate impact of Public Law 18-19 on the corporation is projected at $1.7 million.
As a not-for-profit agency, CUC relies heavily on its own revenue and collection from customers to sustain operations.
Public Law 18-19, enacted on Sept. 24, changed CUC’s water and wastewater service rates for the Public School System from government to commercial. That resulted in the PSS water rate to be reduced by 98.4 percent, from $44.30 to 72 cents per 1,000 to 3,000 gallons. It also reduced the PSS wastewater rate by 95.6 percent, from $68 per 1,000 gallons to $3 for 1,000 to 6,000 gallons.
This is projected to save PSS some $2 million every fiscal year. It is currently billed some $4.5 million annually for public schools’ water and wastewater. This is seen to go down to $2.5 million a year.
Also, under Public Law 18-19, any late fees or penalties that have been assessed to PSS shall be waived for fiscal year 2013.
Warren told Saipan Tribune yesterday that CUC is waiting for guidance from the Commonwealth Public Utilities Commission on how the rate relief law will be implemented. He expects the commission to meet next month.
As for the projected $1.7 million loss in revenue, Warren pointed out that the new law allows CUC to offset the amount by adding it to the government rates.
“This is one of the areas we are waiting on guidance from the CPUC,” he said.
CUC experienced losses in all its three facilities last fiscal year: Power operation loss was at $2.6 million; losses for water operations was at $3.14 million; and losses in wastewater operation was at $1.98 million. Overall operating losses was at $7.7 million in the 12-month period.
CUC recently submitted a petition to the Commonwealth Public Utilities Commission to raise its rates. The commission has yet to schedule a rate hearing.
The petition CUC has filed with the CPUC is for base rates only. It does not contain a request to increase the fuel charge at this time.