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Friday, April 18, 2014

More info sought on proposed $20 standby fee for hotels

Seemingly dissatisfied with the information at hand, the Commonwealth Public Utilities Commission was reluctant yesterday to act on a proposed standby charge for large customers of the Commonwealth Utilities Corp. The commission later put off the matter until its April regulatory meeting.

CPUC chair Joseph Guerrero, during yesterday’s rate hearing, specifically cited his concern over the “benchmarks” adopted by the CUC in coming up with the standby charge proposal.

The proposed standby charge costs $20 kW/a month and, once approved, will apply to customers having their own generation exceeding 200 kW; are interconnected to CUC grid; and who purchase less than 10 percent of power from CUC.

CUC earlier disclosed that eight large hotels will be affected once the proposal is appoved.

The proposed $20 kW/monthly charge is projected to earn CUC an extra $180,000 every month, or $2.2 million per year.

At yesterday’s deliberation, CPUC commissioner Dave Guerrero asked how the $20 was reached as the recommended amount for such a fee. It was revealed by CUC officials that the figure was patterned after what is being charged in Guam.

For CPUC chair Guerrero, the commission is “simply not comfortable” using the Guam fee as the benchmark for the CNMI, which has its own environment uniqueness. He said it is not even known if the amount is affordable for affected customers once it is approved.

“We’re having some questions than answers for now,” said Guerrero, adding CUC has to submit more information about the subject for the commission’s review.

The standby charge does not apply to customers with facilities that are used exclusively for emergency services.

It was explained that customers can avoid paying this charge by disconnecting from CUC’s grid. Those who disconnect and then reconnect will incur a penalty charge.

By implementing this standby charge, CUC seeks to ensure that its small customers do not have to pay for capacity that is used only periodically by large customers.

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