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Saturday, April 19, 2014

CUC: Non-rate fees will keep regular rates as low as possible

The Commonwealth Utilities Corp. defended yesterday its proposal to increase not only its electric base rate but also the imposition of mostly new and higher non-rate fees for power, water, and wastewater customers.

CUC chief financial officer Charles Warren told Saipan Tribune that the non-rate fees are being recommended to keep basic rates as low as possible.

He encouraged the public to attend next week’s rate hearings to be further educated on CUC petitions pending before the Commonwealth Public Utilities Commission.

“The non-rate fees are being proposed by CUC in order to keep the regular rates as low as possible. These fees will not be paid by everyone, only those customers who use a particular service,” he told Saipan Tribune.

Warren cited as the best example the fees related to the late or non-payment of bills. He said it takes time and effort—and thus costs money—to determine who has not paid their bills on time, send out delinquency notices, disconnect service, and reconnect service.  

Under CUC’s “non-rate fees” petition, there are two classifications on the power side: administrative fees and electric fees.

Under the proposed non-rate fees for electric, customers will be charged 10 percent of their past due as late charges. This is higher than the existing late charge of only 1 percent of the past due. The inspection fee will also increase from $30 to $90, as well as reconnection fee ($60 for nonresidential meter and $200 for reconnection at pole in nonresidential), among other proposals.

“Is it right for the customers who pay their bills on time to absorb these costs? Or is it more fair for the customers who are late and/or disconnected to pay for the actual costs they have created?” he asked, adding that the same goes for the various inspections, installations, and other services used by a very small portion of CUC customers.  

The non-rate fee petition also endorses separate fee schedule for water and wastewater that, if approved, will take effect next month.

Among the new proposed rates for water is the imposition of a $90 inspection fee; imposition of meter test for water, $95; disconnection fee, $45; and unauthorized connection fee, $550; among others. Like power and wastewater customers, late charges will be 10 percent of the past due. Certain fees are also recommended when used by customers, similar to the amount proposed in the electric side.

New CPUC

The CPUC is scheduled to tackle at its upcoming hearings several items endorsed by CUC. These include the $4.93 million increase in electric base rates to fund revenue requirements such as the needed $1.2 million payment due to the Commonwealth Development Authority and the $1.4 million required for the annual expenses related to the independent power producer on Tinian, the Telesource CNMI.

Also on the CPUC table for action are the proposed revision of residential customer rate blocks, proposed amendment to the electric lifeline rate, the recommended establishment of a standby charge for large electric customers, and the proposed interim delegation of authority to CUC regarding monthly LEAC (levelized energy adjustment clause) adjustment. Last is the proposed new “non-rate” fees (administrative and electric) for CUC customers.

Since the dissolution of the old CPUC in 2012, it is only this year that a CPUC will resume its function.

Warren told Saipan Tribune yesterday that he had the opportunity to meet with the new members of the CPUC and looks forward to working with them.

“I’ve had the opportunity to meet with them only briefly on a couple of occasions. During those times, I found the commissioners to be very engaged and obviously dedicated to the difficult task they have undertaken. All of us at CUC look forward to working with the new commissioners and will do whatever we can to facilitate their efforts as our regulator,” he added.

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