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Thursday, April 24, 2014

Fletcher: CUC saved nearly $2K with office relocation

Faced with criticisms of mismanagement, Commonwealth Utilities Corp. Alan Fletcher defended his stint as executive director and said his decision to relocate some of the utility company’s offices actually resulted in savings.

On the downside, Fletcher said that due to the installation of many streetlights on Saipan, the Department of Public Works’ utility billings didn’t go down as projected.

He gave these statements in response to a recent resolution filed at the House of Representatives asking for his removal from office. Part of House Joint Resolution 18-15 states: “CUC has been outfitting executive offices with lavish furnishings at a time when the regular customers find it hard to even pay their utility bills.”

Fletcher said the decisions regarding office space, locations, and furnishings occurred before he became the agency’s chief, although he supported these decisions.

“CUC relocated the water and wastewater division to Sadog Tasi in part with grant funding and in part with the Sadog Tasi Wastewater Treatment Plant upgrade. That move did not cost ratepayers money. CUC was also able to get a new agreement with our Dandan facility landlord after going through a proper procurement in 2011 for office space,” said Fletcher.

He revealed that CUC previously paid $21,870 per month for the third floor Dandan office and the former ground floor customer service area. The total land area being rented was about 23,000 square feet.

“The new lease agreement for Dandan is now $13,884 per month for 25,711 square feet, and the new lease for Oleai is $5,335 per month for 9,880 sq. ft. This means that CUC’s space rental cost went down from $21,870 per month to $19,219 per month and CUC’s rental area went from 23,000 sq. ft. to 35,591 sq. ft.,” Fletcher explained.

He described this move as a “solid business decision” that gave CUC two locations—one of which is far better suited for the transmission and distribution division. Additionally, there is now more square footage for operations and customer service.

On LED streetlights

Fletcher was also criticized that “CUC has failed to make a reduction on its rates to DPW to reflect savings realized pursuant to switching to LED (lights emitting diodes) street lights” funded through ARRA monies.

Fletcher pointed out that in January 2012, prior to becoming executive director, the then-CPUC approved a new streetlight tariff that detailed how streetlights would be billed.

“Understanding that high pressure sodium lights use a lot of more energy than LED lights, different rates were set for each type of luminaire. As a result, as LED lighting is installed, the bills changed accordingly,” explained Fletcher.

Based on the tariff for streetlights, LED lights are expected on average to consume 575 kWh/month, while the sodium “long arm” lights are expected to consume 101 kWh/month.

“Billings are calculated accordingly. Also, during the time the LED lights were being installed, the streetlight inventory was updated and corrected. The result is that, even with the more efficient LED lights installed, actual kWh/month being billed have increased due to better accounting for the actual number of streetlights,” added Fletcher in his response to the Legislature.

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