Chamber conducts study of CUC rates

The Saipan Chamber of Commerce is conducting its own analysis of the increased electricity rates being implemented by the Commonwealth Utilities Corp. to determine if it is justified or not.

“The Chamber is looking closely at CUC rates, their proposal from the Economist.com. We’ll come out with our own [findings]. We are questioning their numbers,” said Chamber president Charles V. Cepeda in an interview.

He said the Chamber’s government relations committee chaired by vice president Alex Sablan has met with CUC and Economist.com officials as well as administration officials.

“We’re asking them to explain the current rate. How they came out with that. We are questioning their numbers. They tried to explain and justify them but we’re reviewing. We are doing research,” he said.

Cepeda said the Chamber is looking at Guam’s power rates for comparison.

On related news, Cepeda said that the Chamber supports the creation of the Public Utilities Commission as a regulatory body to oversee all utility operations in the CNMI. But he just hopes that the newly created body would seriously examine the CUC rates.

“We are in favor of that [PUC] but we are also wondering what would be the outcome on CUC’s rates. Are they going to make it obsolete? What is it [PUC] going to do with that [power rates]?” he asked.

Acting Gov. Timothy P. Villagomez signed Tuesday the Public Utilities Commission law, which would regulate all public utilities, including cable television, telephone, power, and water services.

The new law establishes rules to ensure that all utility rate increases are justified. It will also completely eliminate government subsidies for the Commonwealth Utilities Corp.

PUC’s creation resulted in the demise of the Commonwealth Telecommunications Commission, the regulatory body that handled the Verizon sale to Pacific Telecom Inc.

PTI, the only public utility regulated under the old CTC law, has welcomed the enactment of the law, believing that “this will be the beginning of the turnaround of our economy.”

The new law would lower PTI’s annual franchise fee from 2.5 percent of its annual gross revenue. Under the new law, each public utility will have to pay only 0.75 percent of its annual gross revenue, or $135,000, whichever is less.

Since the new law applies to all public utilities, PTI will no longer be the sole provider of operating funds for its regulatory agency.

Michael Fitzgerald, chairman of the now defunct CTC, had opposed many of the provisions of the PUC measure, saying that it would get rid of the past five years of work CTC had done.

He also warned that the new law would allow anyone in the government “who had an axe to grind or a special interest to do exactly that.”