30-50 percent discount for low-end power users eyed

The Commonwealth Utilities Corporation and the Legislature are still ironing out how to apply the planned rate subsidy for electric customers.

CUC executive director Antonio Muna met with the House Committee on Public Utilities, Transportation and Communications yesterday to discuss what relief can be offered to customers following the recent doubling of power rates.

The law, which suspended the rolled back power rates, provided some $9 million for CUC’s fuel expenses. The subsidy was not factored into the computation of the current power rates.

In the meeting yesterday, Muna and the PUTC committee agreed that subsidy should be given to low-end customers, specifically to those who use 1,000 kWh or less a month. It is not clear how much “discount” will be given to these customers, but CUC and the lawmakers are looking at 30 to 50 percent.

Muna said the credit would be applied once CUC received the subsidy payment from the Department of Finance. To date, all of the government funds paid to CUC are booked as payments for the central government’s utility billings.

He added that the amount of discount to be given to qualified customers would depend on how the $9-million subsidy would be paid to CUC on monthly basis.

CUC estimates that customers in the 1,000-kWh block range would billed a total $1.5 million, under the current power rates.

“Potentially, we could get a subsidy of $1.5 million, and if the bills we need to address is $1.5 million, then it essentially means no billings. We want to put some balance in the equation. We expect fuel to go up, so we need to make sure that people are getting a rate relief going forward, not just a one-time shot,” said Muna.

Muna expressed hope that the rate subsidy would be finalized before majority of the May billings come out in the middle of June. If this is done, he said, low-end customers can expect their bill to show a line item for “fuel credit.” If not, the discount will be applied when they pay at CUC.

A new rate schedule went into effect on May 3, 2008. Under the new scale, customers must pay a total of 37.3 cents per kWh for the first 500 kWh of usage. The rate increases with consumption.

Prior to May 2008, customers paid 17.6 cents per kWh for the first 1,000 kWh.