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Thursday, April 17, 2014

PSS opposes CUC’s proposed non-rate fees
‘Proposed ten-fold increase in late fees, disconnection notice fee will cost PSS millions of dollars’

Education Commissioner Dr. Rita A. Sablan and Public School System finance director Derek Sasamoto have called on the Commonwealth Public Utilities Commission to junk the imposition of non-rate fees by the Commonwealth Utilities Corp., saying the move would not only bring further chaos but would ultimately destroy the education system on the islands.

Under the rate case it filed with CPUC, the utility agency proposes to either increase or impose new fees. Although some of the recommended fees were postponed until the April regulatory session, several items are still up for CPUC action next month.

PSS specifically described as unreasonable CUC’s proposed late charge of 10 percent of the past due amount. Currently, the penalty for late payments is 1 percent of the past due amount.

“The imposition of a ten-fold, or 1,000 percent, increase to the late charges is substantial and unreasonable. For an agency such as PSS, such a drastic increase will cripple operations and significantly affect services that PSS provides,” PSS officials told the commission, adding that unlike CUC, PSS does not generate revenue and has no mechanism to, for example, raise rates to fund operations.

According to Sablan, “the imposition of a ten-fold increase to late fees will costs PSS millions of dollars each year and will destroy the agency, which will destroy public education.”
PSS also disagrees with the imposition of a $15 disconnection notice for electric as proposed by CUC.

“The $15 fee may seem insignificant, but for PSS’ financial difficulties, this fee will be significant if imposed. PSS’ 19 schools, numerous programs, and central office equates to over 250 billings per month. If for example, PSS were to incur this fee, this would equal to thousands of dollars each month. PSS has no plans to pay bills untimely, but the reality is PSS does not always receive its appropriations and this affects operations and cash disbursements,” explained Sablan, adding that conditions like these are out of PSS control but PSS absorbs the negative repercussions.

Moreover, according to Sablan, this fee is “quite hefty.”
“It would seem reasonable to assume it takes CUC staff a few minutes or likely less to produce one disconnection notice. Yet the fee for one notice is $15. Thus, CUC is charging $15 for a minute or few minutes when it is highly likely the CUC staffer producing the notices does not receive compensation in the amount of $15 per hour. Thus, this fee appears unreasonable,” said the commissioner.

PSS also sought clarification on the proposed labor fees, both after hours and regular business hours.

“How will these fees be applied? Will it be applied to every bill, for example? Will it be assessed on an hourly basis? Will it be assessed whenever a CUC employee interacts with a customer? With the sheer number of utility billings PSS receives each month, these costs again, will negatively impact operations,” added the education official.

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