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Friday, April 25, 2014

Sablan urges probe on high utility rates charged by CUC

The Public School System renewed its appeal against the Commonwealth Utilities Corp.’s proposed rate and fee increases and called for an investigation on the existing rates CUC charges its customers.

Education Commissioner Dr. Rita A. Sablan told Saipan Tribune Friday that any increase in utility fees would further bring “financial chaos” to the school system, which has a very limited budget for utilities.

The Commonwealth Public Utilities Commission is expected to render a decision this month whether it will approve or not the rate hike petition filed by CUC. Among the many items the CPUC will need to act on are the $2.8 million electric base rate increase and the imposition of new and higher non-rate fees for electric, water and wastewater divisions.

“Whenever there’s an increase in fees—whether for power rates or non-rate fees—it’s always a big concern for PSS because we have to sacrifice somewhere as these are not factored and included in our budget,” Sablan said.
This fiscal year, PSS has been allocated a budget of $33 million, of which only $2.3 million is earmarked for utilities. PSS has 19 campuses on three islands plus central offices.

“If CPUC would approve a rate increase, let’s say 10 percent, we have to look for that 10 percent somewhere! During the public hearings, we made this very clear that we’re totally against the proposed increase because it would affect our schools,” said Sablan.

Instead of considering the proposed rate hikes, Sablan said the CPUC should instead launch an investigation to see if the corporation is reasonably charging its customers.

“Why they are increasing the rates? Because they cancelled a contract and then penalize and pass the burden to the customers? That must be investigated by CPUC to see why CUC is all of a sudden not doing its due diligence. Why did it cancel the PMIC contract, for example, and now we’re the ones to shoulder the cost of the penalties?” she asked.

Based on the petition it filed with the regulatory commission, CUC wants to increase its base rates so it could pay for the remaining balance of the contract it bought out from independent power producer Pacific Marianas Industrial Corp., which used to run CUC’s Power Plant 4. The plant now serves as a standby.

In December, Sablan and PSS finance director Derek Sasamoto appealed to the CPUC to junk CUC’s petition, saying the move would not only bring further chaos but ultimately destroy the education system on the islands.

Also last month, CUC filed a collection suit against PSS, the public hospital, and the central government for failing to pay their obligations amounting to over $18 million. PSS’ share was at $6 million.

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