Power rates, govt fees go up

Gov. Benigno R. Fitial has signed into law the omnibus bill that provides the Commonwealth Utilities Corp. cash for fuel.

The measure, now Public Law 16-2, is seen to help CUC reduce its expected shortfall of $11.3 million by Sept. 30, 2008.

The legislation suspends up to Dec. 31, 2008, the power rates rollback, which has caused CUC a monthly shortfall of $1 million in fuel costs alone.

But Tony Muna, the newly appointed CUC executive director, said that even if new rates are applied immediately, it may take CUC some time to see the benefits. There is a lag time of about 45 to 60 days between CUC’s billing date and the final deadline for customer payment.

CUC’s next tanker fuel delivery is expected in three weeks, he noted.

The new law allows the Public Utilities Commission to issue emergency and interim power rates. It eases the quorum requirements for PUC, allowing the regulatory board to set rates even if there is only one commissioner.

The new law also incorporates fiscal measures such as the reduction of the government’s pension contribution rate from 18 percent to 11 percent of the total payroll. Half of the savings from the reduction—about $5.63 million—will go to CUC’s fuel expenses. Some $80,000 will go to PUC’s startup operations. The rest—approximately $5.55 million—will be used at the governor’s discretion.

Further, the law grants the governor unlimited reprogramming power over lapsed funding, re-appropriates some $2.15 million of suspended earmarks to CUC’s fuel expenses, and allows CUC to use half of its customers’ security deposits for fuel.

Gross business tax will now apply to banks. Fees and charges for services such as driver’s license, vehicle registration, firearms license, police report, and marriage license will double.

The measure cleared the Legislature despite some lawmakers’ reservation. One particular provision that many legislators view as potentially problematic is the one allowing a one-man PUC to set rates.

Rep. Tina Sablan, who has called the legislation “an act of fear and poor planning,” has expressed hope the governor would use his line-item veto power to strike the provision.

House Speaker Arnold I. Palacios also said he was concerned about the provision.

The new 11-percent contribution rate is also expected to have adverse effects on the NMI Retirement Fund, whose actuarial consultant had said that the government should pay 37.4 percent of its payroll to keep the pension program afloat.