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Senate OKs bill suspending power rate rollback statute
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Posted on Apr 12 2008
The Senate has approved legislation that would reverse the October 2007 rollback of local power rates.
But the Senate did not clear the bill without a fight. The upper chamber inserted an amendment saying that the rollback law will only be suspended for 60 days, instead of being repealed.
The Public Utilities Commission must set new rates within those 60 days. If the regulatory body fails to do so, the rolled-back rates will again come into effect.
The bill, which originated in the House of Representatives, will return to the lower chamber for approval of the amendment. If the House concurs, the bill will be sent to the governor for his signature. If not, a conference committee made up of House and Senate member will be formed to iron out disagreements and draft a compromise bill acceptable to both houses.
House Bill 16-79 would restore the previous rate structure that the Commonwealth Utilities Corp. adopted in 2006 in a bid to cope with oil price increases.
The bill would overturn Public Law 15-94, which forced residential rates down to 17 cents per kWh in October 2007, and either reduced or scrapped other charges for residential customers.
The 15th Legislature passed P.L. 15-94 amid pressure from consumers who were suffering from the sudden hike in power rates.
However, the Legislature’s action hurt the utility’s finances. According to CUC, the rollback, compounded by the rising cost of fuel, has caused the utility to face a monthly shortfall of about $1 million for fuel. For months now, the cash-strapped government has ended up paying millions of dollars in fuel subsidy to CUC.
This occurred even though the 17-cent rate remained in effect for one month only. In November 2007, CUC adopted emergency regulations that enabled the utility to adjust the power rates depending on fuel prices.
The Fitial administration has succeeded for the first time in organizing the Public Utilities Commission. It is counting on the regulatory board to set a rate structure that is fair to both CUC and the customers.
